The United States Securities and Exchange Commission (SEC) recently granted approval for Spot Bitcoin ETFs. However, TD Cowen, a prominent American investment bank and financial service firm, predicts potential delays in the approval process of Ethereum Spot ETFs. This article explores the reasons behind TD Cowen’s forecast and considers the perspectives of other market analysts and experts.
TD Cowen, the investment bank and financial service division of TD Securities, suggests that the US SEC is unlikely to approve Ethereum Spot ETFs within the expected timeline. The SEC is obligated to make its final decision on the acceptance or rejection of Ethereum Spot ETFs between May 23 to August 7, 2024. Despite the approval of Spot Bitcoin ETFs, TD Cowen believes that the SEC will be cautious and accumulate more knowledge and experience before approving Ethereum Spot ETFs.
Earlier this year, the SEC officially approved Spot Bitcoin ETFs, triggering expectations for similar approval for ETH Spot ETFs. Major firms such as Ark 21 Shares, VanEck, Fidelity, BlackRock, and Hashdex have already submitted applications for a Spot Ethereum ETF. The SEC has also established a new deadline for Grayscale’s Ethereum Spot ETF, which is set for January 25. However, TD Cowen predicts that approval may be postponed beyond the upcoming elections.
Scott Melker, a crypto investor, speculates that the SEC may hesitate to approve Ethereum Spot ETFs. Melker suggests that external legal pressures, like those observed during the approval process of Spot Bitcoin ETFs, might be necessary to push the SEC towards approving ETH Spot ETFs. He expresses doubt that the SEC Chair, Gary Gensler, would entertain an Ethereum Spot ETF without such pressures.
JP Morgan, a multinational financial service firm, complicates the approval process for Ethereum Spot ETFs. Nikolaos Panigirtzoglou, Managing Director at JP Morgan, states that there is a 50% chance of the SEC approving these ETFs by the May deadline. Panigirtzoglou highlights the need for the SEC to classify ETH as a commodity, similar to Bitcoin, before granting official authorization for Ethereum Spot ETFs.
In contrast to TD Cowen’s predictions, Eric Balchunas, a senior analyst at Bloomberg, is more optimistic about the approval of Ethereum Spot ETFs. Balchunas suggests a 70% chance of the SEC approving these ETFs. According to him, it is unlikely for the SEC to approve Spot Bitcoin ETFs and reject Ethereum Spot ETFs simultaneously.
While the SEC has approved Spot Bitcoin ETFs, the approval process for Ethereum Spot ETFs is anticipated to face potential delays. TD Cowen predicts cautiousness from the SEC, with the regulator accumulating more knowledge and experience before granting approval. Other market analysts have varying views, with some suggesting the need for external legal pressures, and others expressing optimism regarding approval. Only time will reveal the SEC’s final decision on Ethereum Spot ETFs, and investors are advised to conduct thorough research and consider the inherent risks before making any investment decisions.
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