US investment bank TD Cowen: ``Ethereum ETF will not be approved immediately''

“Ethereum spot ETF approval still a long way off”

U.S. investment bank TD Cowen believes that it is unlikely that the U.S. Securities and Exchange Commission (SEC) will approve a physical ETF for the cryptocurrency Ethereum (ETH) any time soon. The Block reported on the 13th.

The company’s research group, led by Jarrett Seiberg, said:

We believe the SEC will not approve ETFs of other crypto tokens for the foreseeable future. I think the SEC will first examine the situation after the approval of the Bitcoin ETF and want to take a look at the situation.

It may not take as long as 26 months (which is the period after futures ETF approval) to approve other crypto spot ETFs, such as Ethereum, but it will likely be after the presidential election (in November).

TD Cowen goes on to say that legislation may be needed in the US Congress to establish a framework for how cryptocurrencies will be regulated and which institutions will be responsible for protecting investors. Ta.

In the United States, a presidential election is scheduled for November this year. Among the candidates, Vivek Ramaswamy, Ron DeSantis, and Kennedy Jr. have expressed support for cryptocurrencies.

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Forecasts vary by company

Regarding the Ethereum spot ETF, major bank JP Morgan also analyzes that the possibility of approval by May is “less than 50%”.

The SEC reasoned that approval would first require Ethereum to be classified as a commodity rather than a security, which would not be possible until May.

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JP Morgan analyzes the possibility of Ethereum spot ETF approval by May as “50% or less”

SEC Chairman Gensler commented that the approval of a Bitcoin spot ETF does not indicate an intention to approve the listing standards for “virtual currency securities.” Gensler has said that as of 2022, cryptocurrencies that can be staked will likely be subject to securities laws.

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Subsequently, in a 2023 lawsuit against Binance, the SEC alleged that 12 stocks, including Solana (SOL), Polygon (MATIC), and Cardano, were securities. On the other hand, the fact that Ethereum was not mentioned by name attracted attention.

Gensler has said in the past that “everything other than Bitcoin is considered a security,” but he has avoided referring to Ethereum by name as a security.

Bloomberg analyst James Seifert is optimistic that the SEC implicitly recognized Ethereum as a commodity when it approved the Ethereum futures ETF in September.

Another Bloomberg analyst, Eric Balchunas, also estimated the probability of approval by May at 70%, saying, “I can’t imagine a scenario where a Bitcoin spot ETF is approved and an Ethereum spot ETF isn’t.”

Currently, BlackRock, Fidelity, VanEck and others are applying for Ethereum spot ETFs, with Hashdex and VanEck’s being the first to reach the deadline, with results expected to be announced in May.

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Bitcoin ETF special feature

What is staking?

A system in which by owning a specific virtual currency, you contribute to managing that currency’s blockchain network and receive compensation in return. Strictly speaking, it is not only necessary to hold virtual currency, but also to deposit it on the network. It can be said that it is similar to a system where you save legal currency in a bank account and receive interest after a certain period of time. Furthermore, staking can be done with currencies that use the PoS (Proof of Stake) consensus algorithm.

▶️Virtual currency glossary