Spot Ethereum ETF: Will It Get Approved Soon?

TD Cowen Anticipates Delay of Spot Ethereum ETF Approval, Citing Lack of Incentive for SEC Chair Gary Gensler.

TD Cowen is not optimistic about the possibility of an Ethereum ETF being approved in 2024.

Last updated: January 30, 2024 07:49 EST | 2 min read

Source: DALL·E 3

The cryptocurrency market has been eagerly awaiting the approval of a Spot Ethereum ETF (Exchange-Traded Fund). However, TD Cowen, a leading financial institution, believes that such an approval may not happen anytime soon. In this article, we will delve into the reasons behind this prediction and explore the potential implications for investors and the crypto market. 📉🤔

No Upside for SEC Chair Gary Gensler?

Following the recent approvals of Bitcoin spot funds, the next natural milestone in the crypto market would be the approval of an Ethereum spot ETF. However, analysts at TD Cowen do not foresee this happening in the near future. They argue that the SEC Chair, Gary Gensler, has little incentive to approve a spot Ethereum ETF considering the backlash he faced from progressive Democrats after approving a spot Bitcoin ETF earlier. According to the analysts, Gensler would require the support of progressive lawmakers to pursue his agenda, and their backing would be crucial if he decides to transition to another position. This political consideration suggests that an Ethereum ETF approval may be delayed. 🚫📉

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Gensler’s Caution and Gradual Approach

TD Cowen also points to Gensler’s cautious and gradual approach to crypto regulation. The SEC Chair has publicly stated that the approval of a Bitcoin ETF does not reflect the Commission’s willingness to approve listing standards for other crypto assets. This statement underscores Gensler’s measured approach to regulating cryptocurrency and implies that he would want more experience with the performance of the recently approved Bitcoin ETFs before considering an Ethereum ETF. 📈📊

The Categorization Conundrum

One key factor contributing to the delay in approving an Ethereum ETF is the ongoing debate over whether Ethereum should be categorized as a commodity or a security. This classification has significant implications for its suitability as an underlying asset for an ETF. The SEC’s careful approach and hesitation to make a decision reflect the complexity of this issue and the need for thorough evaluation. ⚖️💼

Q&A: What Readers Want to Know

Q1: Why is the approval of a Spot Ethereum ETF significant?

A Spot Ethereum ETF would offer investors a regulated and convenient method to invest in Ethereum, the second-largest cryptocurrency. It would provide broader market access and potentially increase the liquidity and overall adoption of Ethereum.

Q2: When can we expect the first approval of a Spot Ethereum ETF?

While TD Cowen believes it may take another one to two years, other experts have different opinions. Goldman Sachs’ digital assets head, Mathew McDermott, is confident that approval will come in the coming months, and Deutsche Bank estimates a first decision by May 23. Bloomberg’s ETF analyst, Eric Balchunas, even projects a 70% likelihood of approval by May.

The Future of Spot Ethereum ETFs

While the immediate approval of Ether-based spot ETF applications has become less likely, the future for Spot Ethereum ETFs remains optimistic. Industry experts and major financial institutions are still hopeful for approval in the near future. Investors should closely monitor regulatory developments and stay informed about the evolving landscape of the cryptocurrency market. 🕵️‍♀️💰

References:

1. SEC Commissioner Expresses Concerns about Spot Bitcoin ETF Despite Voting in Favor of Approvals
2. US Court Rules in Favor of SEC in Kwon/Terraform Labs Case
3. Statement Regarding Hack X Account Resulting in Fake Bitcoin ETF Approval Announcement
4. Tether Holdings Have the Money, As They Say, Cantor CEO Confirms
5. Follow Us on Google News

Now, it’s your turn! Are you eagerly awaiting the approval of a Spot Ethereum ETF? Let us know your thoughts and share this article with your friends on social media. Together, we can stay informed and navigate the fascinating world of blockchain technology and cryptocurrencies. 💡💻✨

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