TD Cowen Clarifies Potential Approval for Spot Ethereum ETF

In TD Cowen’s latest analysis, the potential approval timeline for a US Spot Ethereum ETF is projected to be by the end of 2025 or the start of 2026.

The potential approval date for a spot Ethereum exchange-traded fund (ETF) in the United States has been clarified by investment bank TD Cowen to be either the end of 2025 or the start of 2026.

The bank stated earlier this month that sanctions could be forthcoming following the November 2024 elections.

Jaret Seiberg, leader of the TD Cowen Washington Research Group, stated, “We do not anticipate the SEC to approve a spot Ethereum ETF in 2024. This decision pertains to politics.

Progressive Democrats are furious with SEC Chairman Gary Gensler for approving a spot Bitcoin ETF earlier this month. Still, we do not believe that Gensler gained anything from approving a spot in the Ethereum ETF.”

In an election year, Gensler, according to TD Cowen, requires progressive support to advance his agenda.

Moreover, the bank stated that Gensler would continue to require progressive support even if he assumes an alternative position, such as Treasury Secretary, if President Joe Biden is re-elected.

As a result, TD Cowen asserts that “initiating an unwarranted conflict serves no purpose.”

Additionally, the note contained the following: “In our opinion, Gensler would prefer to gain more experience with the performance of newly approved spot Bitcoin ETFs before proceeding. This aligns with his overarching strategy towards cryptocurrencies, which entails a gradual and systematic progression towards obtaining regulatory authorization or elucidation.”

TD Cowen’s Perspective on Industry Dynamics

BlackRock and Fidelity are among the roughly half-dozen firms that have submitted applications for spot Ethereum ETFs, and SEC again postponed the proposal for a spot Ethereum ETF by Grayscale Investments last week in continuation of the delays observed in other applications earlier this month.

TD Cowen reports that the SEC may review applications for spot Ethereum ETFs. “In the end, the bank may reject the rule modification, necessitating a fresh application or legal proceeding,” it stated. Both will require at least two years to materialize.”

According to TD Cowen, a sanction could still occur by the end of 2025 or the start of 2026, notwithstanding the failure of Congress to enact a more comprehensive crypto market structure law in 2025. His term concludes in June 2026, Gensler.

Cryptocurrency experts have expressed optimism and pessimism regarding the likelihood of a spot ETF being approved. Some believe that such approval could occur as early as May, which would be the latest such funds could be approved.