TD Cowen, a multinational American investment bank, suggests that the U.S. Securities and Exchange Commission (SEC) is unlikely to approve a spot Ethereum exchange-traded fund (ETF) in the near future. The bank anticipates that the wait could extend to the 26-month period seen with spot Bitcoin ETFs, with expectations of a delay until after the upcoming elections.
The TD Cowen Washington Research Group, led by Jaret Seiberg, predicts that the SEC will avoid immediate approval of ETFs for other cryptocurrencies, including Ethereum. They emphasize the SEC’s tendency to gather experience from Bitcoin ETFs before considering the approval of Ethereum or other cryptocurrency ETFs, expecting a delay that could go beyond the upcoming elections.
The recent approval of spot Bitcoin ETFs by the SEC, following over a decade of rejections, marks a significant milestone. This approval, which came 26 months after greenlighting Bitcoin futures ETFs in October 2021, has led to speculation about the potential approval of spot Ethereum ETFs.
However, TD Cowen cautions that the SEC, under Chairman Gary Gensler’s regulatory strategy for the crypto market, may adopt a slow approach. While some market analysts express optimism about the approval of spot Ethereum ETFs, others, including JPMorgan, maintain reservations.
The applications for spot Ethereum ETFs by leading firms such as BlackRock and Fidelity indicate growing interest in Ethereum as an investment vehicle. SEC Chairman Gary Gensler’s approval of spot Bitcoin ETFs, despite a legal case against Grayscale Investments, suggests a limited choice for the SEC, and TD Cowen believes that Gensler’s deliberate approach may be due to a desire to wait for more court decisions and gather opinions from other jurisdictions before implementing a regulatory regime for cryptocurrencies.