TD Cowen Analysts Say Ethereum ETF Will Not Happen Till 2025

Despite the securities and exchange commission (SEC)’s skepticism around cryptocurrencies, there has been some optimism that Ethereum ETFs may be approved soon.

The optimism is coming after the SEC approved 11 spot Bitcoin ETFs earlier this month. However, Investment bank TD Cowen says this isn’t likely to happen until late 2025. The bank earlier stated that the approval could come in November 2024 after the U.S general elections.

However, considering the trends surrounding the regulatory space, TD Cowen has changed its estimation, expecting the approval to come either by late 2025 or early 2026.

“We do not expect the SEC in 2024 to approve a spot Ethereum ETF,” TD Cowen Washington Research Group, led by Jaret Seiberg, wrote in a note on Monday. “This is a political call. We believe there is no upside for SEC Chair Gary Gensler to approve a spot Ethereum ETF given how upset progressive Democrats were over the agency’s approval of a spot bitcoin ETF earlier this month.”

The bank maintains that SEC chair Gary Gensler is not in a hurry to approve an Ethereum ETF because he needs the support of progressives for his agenda both before and after the election this year.

So, “there is no reason to provoke a needless fight,” TD Cowen said. “We say needless, as our view remains that Gensler is in no hurry to approve an Ethereum ETF as he would first like more experience with the performance of the recently approved spot Bitcoin ETFs. This is consistent with his broader approach to crypto, which is to move incrementally and slowly when it comes to providing regulatory approvals or clarity,” it further stated.

The Optimists

Several applications have been submitted for spot Ethereum ETFs, many of which belong to already approved spot Bitcoin ETF issuers like BlackRock and Fidelity. The SEC last week announced delays on decisions concerning some of the applications that were due.

Despite the delays, some analysts remain optimistic that an Ethereum ETF approval could come this year, contrary to TD Cowen’s position.

A Bloomberg analyst, James Seyffart in a recent interview said there was a 60% chance of the SEC approving an Ethereum ETF in the summer of 2024.

“So if the SEC wants to get geared up and ready to go and wants everyone to go at the same time, they’ll likely do it on May 23 unless they can figure out some way to deny or delay this whole process and do what they want.”

According to some analysts, the approval, even if denied, could be appealed just like the case with Grayscale’s Bitcoin ETF case which eventually led to the approval of the 11 Bitcoin ETFs.

JP Morgan Analysts Agree with TD Cowen

Other analysts from JP Morgan have given their own estimation of when they expect an Ethereum ETF to be approved. They agree with TD Cowen that it may go beyond May if ever the approval comes, as the SEC has to classify Ethereum as a commodity first.

“In our opinion, for the SEC to approve spot Ethereum ETFs in May, it would need to classify Ethereum as a commodity (similar to bitcoin) rather than a security,” JPMorgan’s Nikolaos Panigirtzoglou said earlier this month. “This is far from given, and I wouldn’t put more than a 50% chance to the SEC classifying Ethereum as a commodity before May.”

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