The United States Securities and Exchange Commission’s (SEC) recent approval of Spot Bitcoin ETFs has sparked anticipation for the approval of Ethereum Spot ETFs. However, TD Cowen, a prominent American investment bank and financial service firm, predicts potential delays in the Ethereum Spot ETF approval process. In this article, we will explore the factors leading to the bank’s forecast and the predictions made by industry experts.
The SEC has set a deadline between May 23 and August 7, 2024, for its final decision regarding the acceptance or rejection of Ethereum Spot ETFs. While investors awaited the approval of ETH Spot ETFs following the approval of Spot Bitcoin ETFs on January 10, TD Cowen believes that the SEC is unlikely to approve Ethereum ETFs before the deadline.
TD Cowen’s predictions align with the SEC’s cautious stance towards cryptocurrency-related investment products. The investment bank suggests that the regulatory agency may delay the approval of ETH Spot ETFs until it gains sufficient knowledge and experience from the previously approved Bitcoin Spot ETFs. Although the bank does not anticipate a delay as long as 26 months, it expects the decision to extend beyond the upcoming elections, indicating a potential extended waiting period for investors.
Scott Melker, a well-known crypto investor, echoes TD Cowen’s predictions, emphasizing the SEC’s hesitation to approve Ethereum Spot ETFs without external legal pressures similar to those witnessed during the approval process of Spot Bitcoin ETFs. Melker suggests that Gary Gensler, the SEC chairman, would require court intervention before considering an Ethereum Spot ETF. However, he remains open to being proven wrong.
JP Morgan, a multinational financial service firm, adds another layer of complexity to the approval process of Ethereum Spot ETFs. Managing Director Nikolaos Panigirtzoglou reveals that the SEC would need to classify Ethereum as a commodity, similar to Bitcoin, before granting authorization for Spot Ethereum ETFs. This classification requirement introduces additional hurdles that may prolong the approval process.
Amidst the cautious forecasts, Bloomberg senior analyst Eric Balchunas maintains a more optimistic view regarding the approval of Ethereum Spot ETFs. Balchunas assigns a 70% chance of the SEC approving ETH Spot ETFs, highlighting his belief that the SEC would not approve Spot Bitcoin ETFs while rejecting Ethereum Spot ETFs. His optimistic stance offers hope to investors eagerly awaiting the SEC’s decision.
The approval process for Ethereum Spot ETFs by the SEC involves several factors that may contribute to potential delays. TD Cowen’s cautious forecast aligns with the SEC’s careful approach, suggesting a delay in approval beyond the upcoming elections. Scott Melker adds to these predictions, emphasizing the need for external legal pressures for SEC consideration. Despite these expectations, Eric Balchunas remains optimistic about the approval of Ethereum Spot ETFs. As investors eagerly await the final decision, it is essential to conduct thorough research and make informed investment choices, considering the inherent risks associated with investing in cryptocurrency-related products.
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