The Unlikelihood of Imminent Approval of Ethereum Spot ETFs:
The investment bank TD Cowen predicts that the U.S. Securities and Exchange Commission (SEC) is unlikely to approve Ethereum exchange-traded funds (ETFs) in the near future.
Furthermore, TD Cowen believes that the SEC wants to gain experience with Bitcoin ETFs before considering the approval of ETFs for Ethereum or other cryptocurrencies. The bank adds that the potential approval of Bitcoin Spot ETFs should occur after the U.S. elections, which are scheduled for November 5, 2024.
“We hope that the agency will not approve ETPs for other cryptographic tokens anytime soon because we believe the SEC wants to gain experience with Bitcoin ETP before approving an Ethereum ETP or any other cryptographic token.”
– TD Cowen
This prediction follows the recent approval of Bitcoin Spot ETFs by the SEC, a decision that came 26 months after the approval of Bitcoin futures ETFs in October 2021.
The Uncertain Future of Ethereum Spot ETFs
According to Nikolaos Panigirtzoglou, a representative from JPMorgan, the approval of Ethereum Spot ETFs largely depends on the SEC’s classification of Ethereum as either a commodity, similar to Bitcoin, or a security. This distinction is crucial as it determines the applicable regulatory framework.
JPMorgan, on the other hand, believes that the probability of the SEC classifying Ethereum as a commodity before May is not higher than 50%.
TD Cowen highlights that SEC Chairman Gary Gensler is taking a slow approach, waiting for Congress to pass legislation to establish a clear regulatory framework for cryptocurrencies. Gensler, whose term ends in June 2026, could maintain a democratic majority at the SEC until that date, suggesting a slow and methodical progression in the approval of cryptocurrency-related financial products.
