SEC Still Hasn’t Approved Ethereum ETF, What’s The Reason?

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SEC Still Hasn’t Approved Ethereum ETF, What’s The Reason? In a recent report by TD Cowen, a leading American multinational investment bank, it is estimated that the US Securities and Exchange Commission (SEC) is unlikely to approve an Ethereum ETF in the near future.

Reporting from Coinmarketcap, Tuesday (16/1/2024), the Washington bank’s Research group suggested the SEC would prioritize gaining experience with Bitcoin ETFs before considering approval of Ethereum or other crypto token ETFs.

This assessment is in line with JP Morgan’s cautious view, which also believes Ethereum ETF approval depends on its classification as a commodity and not a security. This change probably won’t happen any time soon.

Read Also: SEC Clarifies After Circulating Fake Bitcoin ETF Approval Announcement

Washington’s TD Cowen Research Group anticipates significant delays before the SEC approves an Ethereum ETF. The bank’s report highlights the need for the SEC to familiarize itself with Bitcoin ETPs before venturing into Ethereum or other crypto tokens.

According to their analysis, it could take up to 26 months before the SEC is ready to approve an Ethereum ETF. Additionally, they suggested that such an agreement would likely be delayed until the next United States election.

The TD Cowen report emphasizes the importance of the SEC’s experience with Bitcoin ETFs as a prerequisite for considering Ethereum and other crypto token ETFs. This cautious approach stems from the recent approval of a spot Bitcoin ETF, which marked an important milestone for the cryptocurrency industry.

These approved ETFs include Blackrock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, Fidelity Wise Origin Bitcoin Trust, and Bitwise Bitcoin ETF. The SEC decided to approve this Bitcoin-focused ETF after years of delays and numerous objections.

TD Cowen is not the only financial institution to express skepticism about the quick approval of an Ethereum ETF. JP Morgan, another leading player in the financial industry, has a similar view.

According to Managing Director at JP Morgan Nikolaos Panigirtzoglou, in order for the SEC to consider approving a spot Ethereum ETF, Ethereum would need to be classified as a commodity, similar to Bitcoin, and not as a security. However, he doesn’t expect such a reclassification to happen anytime soon.

Previously reported, the US Securities and Exchange Commission (SEC) has approved several Bitcoin spot exchange-traded funds (ETFs) after months of speculation.

SEC Still Hasn’t Approved Ethereum ETF, What’s The Reason? Reporting from Coinmarketcap, Thursday, (11/1/2024), the Spot Bitcoin ETF proposed by the asset management company was approved simultaneously before the expected deadline of January 10, 2023.

There are a total of 13 Bitcoin ETF applicants namely BlackRock, Grayscale Investments, Ark Invest & 21Shares, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, Valkyrie, Global X, Hashdex, Franklin Templeton and Pando Asset Management.

Since 2013, many companies have failed to apply for Bitcoin exchange-traded funds. The SEC has repeatedly cited potential market manipulation in the spot market as a reason for rejection.

However, the SEC approved a Bitcoin futures ETF in October 2021, helping push Bitcoin to an all-time high of USD 69,000 or the equivalent of IDR 1 billion (assuming an exchange rate of IDR 15,562 per US dollar) in November 2021.

Over the past few months, there have been numerous meetings between ETF applicants and regulators, with amendments made to S1 filings such as creating shares for cash.

Notably, the filing includes a shared oversight agreement, with many naming US-listed cryptocurrency exchange Coinbase as a partner, to address concerns over spot market manipulation.

Bitcoin prices also increased along with optimism from ET Bitcoin approval. In trading on Thursday (11/1/2024) the price of Bitcoin managed to touch USD 47,441 or the equivalent of IDR 738.3 million.

As previously reported, United States Securities and Exchange Commission (SEC) Chairman Gary Gensler issued a warning to crypto investors on X (formerly Twitter), as many asset managers await a final decision regarding Bitcoin exchange-traded fund (ETF) applications.

Read Also: Police In Canada Use Blockchain Technology To Fight Crypto Crime

Reporting from Yahoo Finance, Wednesday (10/1/2024), in a thread on X Gensler asked investors to be careful and alert to the risks associated with cryptocurrency.

He stressed crypto service providers may not be complying with federal securities laws by offering crypto investment vehicles and cryptocurrencies can be highly risky and volatile.

Gensler also highlighted fraud in the crypto industry, stating fraudsters continue to exploit the growing popularity of crypto assets to lure retail investors into committing fraud.

He cited examples such as fake coin offerings, Ponzi and pyramid schemes, and outright theft by crypto project promoters.

The SEC chairman’s statement came just hours after several Bitcoin Spot ETF issuers filed application amendments with the SEC. This filing is one of the final steps in the crypto ETF approval process in the United States.

Asset managers including Valkyrie, WisdomTree, BlackRock, VanEck, Invesco and Galaxy, Grayscale, ARK Invest and 21Shares, Fidelity, Bitwise and Franklin Templeton have all submitted applications for spot Bitcoin ETFs.

SEC Still Hasn’t Approved Ethereum ETF, What’s The Reason? The SEC has been considering applications for a spot Bitcoin ETF for several years but has not yet approved one. The agency has expressed concerns about Bitcoin’s volatility and potential manipulation in the Bitcoin spot market.

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