TD Cowen Doesn’t Expect Spot Ethereum ETF Approval Soon
According to analysts at TD Cowen, the approval of a Spot Ethereum ETF is unlikely in the near future. The analysts believe that SEC Chair Gary Gensler has no incentive to approve such an ETF, considering the backlash from progressive Democrats over the approval of a Spot Bitcoin ETF. They also suggest that Gensler would need support from progressive lawmakers to advance his agenda, and their support would be crucial if he decides to transition to another position. The analysts predict that Gensler will wait for more experience with the performance of recently approved Spot Bitcoin ETFs before considering an Ethereum ETF, estimating a decision in late 2025 or early 2026.
Spot Ethereum ETFs Hang in the Balance
The SEC’s postponement of its decision on Ether-based spot ETF applications from Grayscale Investments and BlackRock has dampened hopes for immediate approval. The SEC’s cautious approach is evident, as it deliberates whether Ether should be classified as a commodity or a security. This classification determines its suitability as an underlying asset for an ETF. While an Ethereum ETF is likely the next step after Bitcoin spot fund approvals, uncertainties regarding classification and regulatory considerations contribute to the hesitation.
Most Expect May Approval for Spot Ethereum ETFs
Several experts speculate about when the first approval of a Spot Ethereum ETF may occur. Goldman Sachs’ Mathew McDermott is confident that approval will happen in the coming months. Deutsche Bank estimates that the SEC will make its first decision on an Ethereum ETF by May 23. Bloomberg’s ETF Analyst, Eric Balchunas, projects a 70% likelihood of approval by May. However, amid regulatory considerations and uncertainties, it remains uncertain whether these predictions will come true.
Hot Take: Slim Chances for Spot Ethereum ETF in 2024
Based on TD Cowen’s analysis and the cautious approach of SEC Chair Gary Gensler, it appears unlikely that a Spot Ethereum ETF will be approved this year. The political landscape and the need for support from progressive lawmakers contribute to this outlook. Additionally, Gensler’s preference for more experience with Spot Bitcoin ETFs before considering an Ethereum ETF further delays the potential approval. While there are hopes for approval in the future, it may take several years before a decision is made. In the meantime, investors and enthusiasts will have to monitor developments and navigate the evolving crypto regulatory landscape.
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