TD Cowen says Ethereum ETFs clear the way for more crypto funds

Quick Take

  • Fresh from the approval of spot Ethereum ETFs, the major investment bank sees approval of other funds, such as a fund that tracks a basket of coins, as only a matter of time, though the SEC’s internal approach to crypto hasn’t changed. 

While the relatively speedy approval of Ethereum ETFs this week caught some by surprise, investment bank TD Cowen's research group saw the approval as inevitable following the approval of Bitcoin ETFs earlier this year. 

"This comes about six months faster than we expected...yet this decision was also inevitable once the SEC approved crypto futures ETFs," Jaret Seiberg from TD Cowen's Washington Research Group wrote in a note on Thursday. Next to come within a year might be an offering with a "basket of crypto tokens," possibly just Bitcoin and ether but possibly more, Seiberg continued. 

However, the approval doesn't signal an overall change to the SEC's overall posture towards crypto, as crypto-critical chair of the Commission Gary Gensler issued a "highly critical" statement against the passage of crypto legislation that could diminish his agency's power. 

"The crypto industry’s record of failures, frauds, and bankruptcies is not because we don't have rules or because the rules are unclear. It’s because many players in the crypto industry don’t play by the rules," Gensler wrote in a statement shortly before the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act, or FIT 21

Although Gensler;s agency may face a setback, TD Cowen predicts the SEC will keep its Democratic majority through 2026. "...We expect the agency will continue to litigate against crypto trading platforms that trade tokens that the agency believes are unregistered securities," the researcher wrote. 


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© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Zack Abrams is a writer and editor based in Brooklyn, New York. Before coming to The Block, he was the Head Writer at Coinage, a Web3 media outlet covering the biggest stories in Web3. The story he co-reported on Do Kwon won a 2022 Best in Business Journalism award from SABEW. Other projects included a deep dive into SBF's defense based on exclusive documents and unveiling the identity of the hacker behind one of 2023's biggest crypto hacks — so far. He can be reached via X @zackdabrams or email, [email protected].

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