The recent approval of an Ethereum exchange-traded fund (ETF) opens the door to more crypto investment products, according to a study by TD Cowen's Washington Research Group.
While the speed of the approval surprised some, the research group sees it as an inevitable outcome following the approval of a Bitcoin ETF earlier this year.
Jarrett Seiberg, a team member at TD Cowen, noted that while the Ethereum ETF's approval came about six months earlier than expected, it was predictable since the Securities and Exchange Commission (SEC) had already given the green light to a cryptocurrency futures ETF.
An ETF containing a basket of cryptocurrency tokens could be next
Seiberg further suggested that within the next 12 months, we may see investment products that include a “basket of crypto tokens” that could include Bitcoin and other cryptocurrencies, or even more.
However, the approval of an Ethereum ETF does not signal a broader change in the SEC's stance on cryptocurrencies.
SEC Chairman Gary Gensler, known for his critical stance towards the crypto industry, made a critical statement Regarding the passage of cryptocurrency-related bills that could weaken the authorities' powers.
Gensler highlighted the industry's history of failures, fraud, and bankruptcies, arguing that these are not due to a lack of rules, but rather the disregard for existing regulations by many players in the crypto space.
His statement was made ahead of the introduction of the Financial Innovation and Technology Act for the 21st Century (FIT 21). Passed by the U.S. House of Representatives.
While Gensler's agency may face challenges, TD Cowen predicts the SEC will maintain a Democratic majority through 2026.
The research group expects the SEC to continue its lawsuits against cryptocurrency trading platforms that trade tokens that the SEC considers to be unregistered securities.
Spot Ethereum ETF Approval Proves ETH Is Not a Security
According to industry experts, the recent approval of a spot ETH ETF could confirm Ethereum’s status as a non-security.
Bloomberg ETF analyst James Seifert reportedly said: said Approval of These commodity-based trust shares mean that the SEC explicitly recognizes Ether as not being a security.
Seifert further suggested that this recognition could be extended to other tokens, strengthening their classification as commodities:
Digital asset lawyer Justin Browder echoed Seyfert's sentiments, saying that once the Ethereum ETF receives S-1 approval, the final requirement to begin trading, the debate will be settled once and for all, confirming that ETH is indeed not a security.
This is an important point: the reason the approval of the Spot ETH ETF clearly indicates that the SEC does not consider ETH to be a security is because funds with more than 40% of their assets in securities cannot register via Form S-1, but rather are considered investment companies… https://t.co/Q2MkMsrqNg
— Tuongvy Le 🗽🔭🍕🦄 (@TuongvyLe12) May 23, 2024
Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, took the argument a step further, suggesting that the idea could also be applied to tokens for other projects.
May 23, Officially approved by the SEC 19b-4 filings from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy and Bitwise for spot Ether ETF issuances.
Notably, several ETF issuers removed staking from their final amendments.
Seifert predicts S-1 approval could be granted within “a few weeks,” but acknowledges that the process can take longer, typically up to five months.
But Bloomberg ETF analyst Eric Balchunas said: Released in mid-June teeth surely Possible.
