TD Cowen predicts SEC unlikely to approve spot Ethereum ETFs in the near future

The SEC is Unlikely to Approve Ethereum ETFs Soon, Says TD Cowen

The investment bank TD Cowen predicts that the U.S. Securities and Exchange Commission (SEC) will not approve spot Ethereum exchange-traded funds (ETFs) in the near future. According to TD Cowen, the SEC is likely to want to gain experience from Bitcoin ETFs before approving Ethereum or other crypto token ETFs. The initial deadline for approving such funds is in May.

Spot Bitcoin ETF Approvals Open Door for Ethereum ETFs

The recent approval of spot Bitcoin ETFs has led traders to believe that spot Ethereum ETFs could be the next in line for approval. However, some analysts, like those at JPMorgan, are less optimistic. JPMorgan’s Nikolaos Panigirtzoglou believes that for the SEC to approve spot Ethereum ETFs in May, Ethereum would need to be classified as a commodity rather than a security.

Big Firms File for Spot ETH ETFs

Several major firms, including BlackRock and Fidelity, have recently filed for spot Ethereum ETFs.

Gensler Takes a Go-Slow Approach

SEC Chair Gary Gensler’s recent approval of spot Bitcoin ETFs is seen as consistent with his approach of taking things slow and learning from other markets. TD Cowen believes that Gensler sees enforcement actions and litigation as aiding the process of establishing a regulatory framework for cryptocurrencies. Gensler’s term ends in June 2026, giving him time to bring more cases and await court rulings before rushing legislative action.

Hot Take: The SEC’s Cautious Approach Delays Crypto Market Structure Legislation

The SEC’s hesitation in approving cryptocurrency ETFs reflects its cautious approach to establishing a regulatory framework for the crypto market. While spot Bitcoin ETFs have been approved, the SEC is unlikely to approve spot Ethereum ETFs in the near future. This delay could potentially hinder the development of comprehensive crypto market structure legislation. SEC Chair Gary Gensler’s go-slow approach aims to learn from other jurisdictions and narrow the issues that Congress must address in order to enact effective regulations. Gensler’s term provides him with ample time to shape the regulatory landscape and avoid rushing legislative action.