Investment bank TD Cowen predicts the U.S. Securities and Exchange Commission (SEC) will approve a spot bitcoin exchange-traded funds (ETFs) by the Jan. 10 deadline as a “political necessity.” The bank’s analyst believes that the SEC needs to “cement its role as a crypto regulator before Congress consider broader crypto legislation.”
‘This Is a Political Necessity’
Investment bank TD Cowen’s research team expects the U.S. Securities and Exchange Commission (SEC) to approve a spot bitcoin exchange-traded fund (ETF) by the Jan. 10 deadline, viewing it as a “political necessity.” This date marks the first decision deadline this year; it’s for a spot bitcoin ETF proposal submitted by Cathie Wood’s Ark Invest and 21shares.
In a note published on Tuesday, TD Cowen Washington Research Group, led by financial analyst Jaret Seiberg, explained:
To us, this is a political necessity as the agency needs to cement its role as a crypto regulator before Congress consider broader crypto legislation.
“We also believe the agency does not want to lose a legal challenge to its refusal to approve bitcoin ETFs,” the investment bank added.
The SEC’s legal battle against Grayscale Investments regarding the crypto asset manager’s application to convert its bitcoin trust (GBTC) into a spot bitcoin ETF ended in defeat in August last year. Initially denying the application, the regulator was forced to reconsider its decision after a court ruling.
Congress is currently considering several cryptocurrency-related bills. Last year, the U.S. House Financial Services Committee passed four digital asset bills: the Financial Innovation and Technology (FIT) for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act, and the Keep Your Coins Act.
TD Cowen believes that there is still an opportunity for lawmakers to negotiate a comprehensive crypto market structure bill during the “lame duck” period following an election. A lame-duck session of Congress is the period between the election and the inauguration of a new government. The investment bank noted:
To get the Senate and White House on board, the SEC will need to be the lead on investor protections.