Ethereum Greenlight ETF Signals Path for More Crypto Investment Funds: TD Cowen

Last Updated: May 26, 2024 12:00 PM EDT | 2 minute read

According to research from TD Cowen’s Washington Research Group, the recent approval of Ethereum Exchange Traded Funds (ETFs) has opened the door to more cryptocurrency investment products.

While the speed of the approval took some by surprise, the research team saw it as an inevitable outcome following the approval of Bitcoin ETFs earlier this year.

TD Cowen team member Jaret Seiberg noted that the Ethereum ETF approval came about six months earlier than expected, but that was to be expected after the Securities and Exchange Commission (SEC) gave the green light to investors. Cryptocurrency futures ETF.

ETFs that include a basket of crypto tokens could come next

Seiberg also suggested that within the next year we could see investment offerings that include a “basket of crypto tokens,” including Bitcoin and others, and potentially more.

However, the approval of Ethereum ETFs does not indicate a broader shift in the SEC’s stance on cryptocurrencies.

SEC Chairman Gary Gensler, known for his critical stance towards the cryptocurrency industry, issued a critical statement regarding the passage of cryptocurrency legislation that could potentially diminish the agency’s authority.

Gensler highlighted the industry’s history of bankruptcies, fraud, and failures, attributing them not to a lack of regulations but to the fact that many cryptocurrency industry players ignore existing regulations.

His statement was released before the Financial Innovation and Technology for the 21st Century Act, or FIT 21, passed the United States House of Representatives.

While Gensler’s agency may face challenges, TD Cowen expects the SEC to maintain its Democratic majority through 2026.

The research team expects the agency to continue filing lawsuits against cryptocurrency trading platforms that trade tokens considered unregistered securities by the SEC.

The approval of the Spot Ether ETF proves that ETH is not a stock

According to industry experts, the recent approval of ETH spot ETFs potentially confirms Ether’s status as a non-security.

As reported, Bloomberg ETF analyst James Seyffart did so said approval of these commodity-based fiduciary actions implies that the SEC explicitly recognizes Ether as not a security.

Seyffart further suggested that this recognition could extend to other tokens as well, solidifying their classification as commodities.

Digital asset lawyer Justin Browder echoed Seyffart’s sentiment, saying that if Ether ETFs received S-1 approval, which is the final requirement to begin trading, it would settle the debate once and for all , stating that ETH is not actually a security.

Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, took the argument one step further, suggesting that this line of thinking could be applied to tokens from other projects as well.

On May 23rd Officially approved by the SEC Applications 19b-4 of VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy and Bitwise for issuing spot Ether ETFs.

Notably, several ETF issuers have removed staking from their final edits.

Seyffart anticipates that S-1 approvals could be granted in a “couple of weeks,” although he acknowledges that the process could take longer, typically up to five months.

However, fellow Bloomberg ETF analyst Eric Balchunas believes that a launching mid-June it is certainly possible.

Fuente