TD Cowen’s Washington Research Group suggests that the recent approval of Ethereum exchange-traded funds (ETFs) paves the way for more crypto investment products. While the speed of approval may have surprised some, the research group sees it as a natural progression following the approval of Bitcoin ETFs earlier this year. Jaret Seiberg, a member of TD Cowen’s team, believes that within the next year, we could see investment offerings that include a “basket of crypto tokens,” possibly including Bitcoin and other cryptocurrencies.
However, it is important to note that the approval of Ethereum ETFs does not indicate a change in the Securities and Exchange Commission’s (SEC) broader stance on cryptocurrencies. SEC Chair Gary Gensler, who has been critical of the crypto industry, has expressed concerns about the passage of crypto legislation that could limit the agency’s authority. Gensler points out that the industry has had its fair share of failures, frauds, and bankruptcies, and attributes these issues to players in the crypto industry disregarding existing regulations.
Despite potential challenges, TD Cowen predicts that the SEC will maintain its Democratic majority until 2026 and continue to litigate against crypto trading platforms that trade unregistered securities. The recent approval of spot Ether ETFs may indicate that Ether is considered a non-security, according to industry experts. This recognition could extend to other tokens as well, solidifying their classification as commodities.
Industry experts, including Bloomberg ETF analyst James Seyffart and digital asset lawyer Justin Browder, believe that if Ether ETFs receive final approval, it would settle the debate once and for all, confirming that ETH is not a security. Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, suggests that this line of thinking could apply to tokens of other projects as well.
On May 23, the SEC officially approved 19b-4 applications from various ETF issuers for issuing spot Ether ETFs. It is worth noting that some issuers removed staking from their final amendments. Seyffart believes that the final approvals could be granted in a few weeks, although the process may take longer, typically up to five months. However, Bloomberg ETF analyst Eric Balchunas believes that a mid-June launch is certainly possible.
