The United States Securities and Exchange Commission (SEC) recently granted approval for Spot Bitcoin ETFs, but TD Cowen, a prominent American investment bank and financial service firm, anticipates potential delays in the approval process of Ethereum Spot ETFs. This article explores TD Cowen’s forecast and provides insight into the factors contributing to the possible postponement.
TD Cowen, an investment bank and financial service division of TD Securities, predicts that the US SEC is unlikely to approve Ethereum Spot ETFs before its deadline. The SEC is currently obligated to make its final decision on the rejection or acceptance of Ethereum Spot ETFs between May 23 and August 7, 2024. This estimate aligns with the SEC’s typical cautious approach towards cryptocurrency-related investment products. The investment bank suggests that the SEC may delay the approval of Ethereum Spot ETFs until it acquires sufficient knowledge and experience from its previously approved Bitcoin Spot ETFs.
Scott Melker, a crypto investor on X (formerly Twitter), also believes that the SEC might hesitate to approve Ethereum Spot ETFs without external legal pressures. Melker speculates that Gary Gensler, the SEC Chairman, would only entertain the idea of an Ethereum Spot ETF if the courts forced it upon him. While Melker expresses doubt about the imminent approval of Ethereum Spot ETFs, he admits that he would be pleasantly surprised if proven wrong.
JP Morgan, an American multinational financial service firm, introduces another layer of complexity in the approval process of Ethereum Spot ETFs. Nikolaos Panigirtzoglou, Managing Director at JP Morgan, believes that there is a 50% chance of the US SEC approving these Spot ETFs by its May deadline. However, Panigirtzoglou adds that the SEC must classify Ethereum (ETH) as a commodity, similar to Bitcoin, before granting official authorization for Ethereum Spot ETFs.
Contrary to TD Cowen’s cautious outlook, Bloomberg senior analyst Eric Balchunas expresses optimism regarding the approval of Ethereum Spot ETFs. Balchunas believes that there is a 70% chance of the SEC approving these ETFs. He argues that given the approval of Spot Bitcoin ETFs, it is hard to envisage a scenario where the SEC would reject Ethereum Spot ETFs.
While the approval of Ethereum Spot ETFs remains uncertain, TD Cowen forecasts delays in the process. The SEC’s cautious approach, the need for external legal pressures, and the classification of Ethereum as a commodity are all factors contributing to the potential postponement. As the SEC carefully navigates the evolving cryptocurrency landscape, investors eagerly await the regulator’s final decision.
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