Ethereum ETF Approval Delayed By SEC, Says TD Cowen

According to a report by TD Cowen, a major American investment bank, the U.S. Securities and Exchange Commission (SEC) is not in a hurry to approve an exchange-traded fund (ETF) for Ethereum, the second-largest cryptocurrency by market capitalization.

The report, published by the TD Cowen Washington Research Group, said that the SEC will likely wait until it gains more experience with Bitcoin exchange-traded products (ETPs) before it considers approving Ethereum or other crypto token ETPs.

The Group, led by Jaret Seiberg, estimated that it could take up to 26 months for the SEC to approve an Ethereum ETF and that such approval would probably not occur before the next U.S. elections.

The Group quoted: We expect the agency will not approve ETPs for other crypto tokens as soon as we believe the SEC will want to gain experience from Bitcoin ETPs before it agrees to an Ethereum or other crypto token ETP.

After years of rejections and delays, the SEC recently approved the first batch of spot Bitcoin ETFs. The approved ETFs include Blackrock’s iShares Bitcoin Trust (NASDAQ: IBIT), Grayscale Bitcoin Trust (NYSE: GBTC), Fidelity Wise Origin Bitcoin Trust (NYSE: FBTC), Bitwise Bitcoin ETF (NYSE: BITB), and others.

JP Morgan Also Doubts Ethereum ETF Approval

TD Cowen is not the only one who expects a long wait for an Ethereum ETF approval. JP Morgan, another leading American investment bank, also expressed skepticism about the SEC’s stance on Ethereum.

Nikolaos Panigirtzoglou, a Managing Director at JP Morgan, reportedly said that the SEC would need to classify Ethereum as a commodity, like Bitcoin, rather than a security to approve spot Ethereum ETFs in May. However, he did not see that happening anytime soon.

Ethereum is undergoing a major upgrade, known as Ethereum 2.0, which aims to improve its scalability, security, and energy efficiency. The upgrade will also transition Ethereum from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) one, which could affect its regulatory status.

Ethereum supporters hope that the SEC will eventually recognize the value and innovation of the Ethereum network, which hosts thousands of decentralized applications (DApps) and smart contracts, and enable more investors to access its potential through an ETF.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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