The approval of spot Ethereum exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) is expected to face delays, according to insights from TD Cowen, an investment bank.
TD Cowen’s Washington Research Group, led by Jaret Seiberg, expressed the belief that the SEC is unlikely to grant approval for Ethereum ETFs before the May deadline. The bank suggests that the SEC would prefer to gather experience from Bitcoin ETFs before considering Ethereum or other digital tokens.
The group stated, “Our expectation is that the agency will not be approving ETPs for other crypto tokens any time soon as we believe the SEC will want to gain experience from Bitcoin ETPs before it approves an Ethereum or other crypto token ETP. The wait might not be as long as 26 months, but it likely would be after the election.”
While the SEC recently approved spot Bitcoin ETFs after a series of rejections spanning over a decade, speculations arise regarding the possibility of spot Ethereum ETFs receiving approval next. However, reservations have been expressed by some financial institutions, including JPMorgan, arguing that the SEC should first categorize Ethereum as a commodity, similar to Bitcoin, rather than a security.
The significance lies in TD Cowen’s interpretation of the SEC’s cautious approach under the leadership of Chair Gary Gensler towards crypto regulation. Notably, major corporations such as BlackRock and Fidelity have submitted applications for spot Ethereum ETFs, indicating a growing interest in this digital asset.
