Revised Timeline Prediction for Approval of Ethereum ETF
Investment bank TD Cowen has updated its prediction for the approval of a spot Ethereum exchange-traded fund (ETF) in the United States. The bank previously anticipated the approval to take place post-November 2024 elections, but it now predicts that the approval will happen in late 2025 or early 2026. The reasons for this significant shift are political and reflect the regulatory approach of SEC Chair Gary Gensler.
Political Dynamics and Regulatory Caution
TD Cowen suggests that the delay in approving a spot Ethereum ETF is a political decision and emphasizes that there is little upside for SEC Chair Gary Gensler to greenlight such an ETF, especially after the recent approval of a spot Bitcoin ETF, which drew criticism from progressive Democrats. According to the bank, with the upcoming U.S. election in 2024, Gensler is expected to take his decisions more cautiously, needing the support of parliament members to advance his agenda or potentially secure a different government position.
Gensler’s Cautious Crypto Approach
The bank asserts that Gensler, a Democrat, is in no hurry to approve an Ethereum ETF and prefers a measured and cautious approach to crypto regulation, wanting more experience with the performance of recently approved spot Bitcoin ETFs before approving an Ethereum counterpart. TD Cowen’s Washington Research Group predicts that even if Congress fails to enact broader crypto market structure legislation in 2025, the spot Ethereum ETF approval might still be delayed until late 2025 or early 2026.
Hot Take
The bank’s Washington Research Group highlights the SEC’s ability to easily delay or dismiss ETF applications using standard administrative procedures, suggesting that final decisions could take several more years unless there’s significant outside influence or political considerations.
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