TD Cowen Forecasts Approval of Ethereum Spot ETF by 2025-2026
Investment bank TD Cowen has adjusted its timeline projection for the approval of a spot Ethereum exchange-traded fund (ETF) in the United States. Previously, the bank predicted that the approval would happen after the November 2024 elections, but now expects it to occur in late 2025 or early 2026. This change is attributed to political factors and the regulatory approach of SEC Chair Gary Gensler.
TD Cowen suggests that the delay in approving a spot Ethereum ETF is a political decision. The bank argues that SEC Chair Gary Gensler has little incentive to approve such an ETF, especially after the recent approval of a spot Bitcoin ETF, which faced criticism from progressive Democrats. In a note, TD Cowen’s Washington Research group stated, “This is a political decision. We believe there is no benefit for SEC Chair Gary Gensler to approve a spot Ethereum ETF considering how upset progressive Democrats were with the agency’s approval of a spot Bitcoin ETF earlier this month.”
With the upcoming U.S. election in November 2024, Gensler is expected to exercise caution in his decision-making, as he would require the support of members of Congress to advance his agenda or potentially secure a different government position.
TD Cowen asserts that Gensler, a Democrat, is not in a rush to approve an Ethereum ETF. The bank notes that Gensler prefers a measured and cautious approach to crypto regulation, wanting to gain more experience with the performance of recently approved spot Bitcoin ETFs before considering an Ethereum counterpart. The bank states, “[The SEC] can ultimately reject the rule change, which would either result in a new application or litigation… Either scenario would take another year or two to resolve.”
TD Cowen’s Washington Research Group predicts that even if Congress fails to pass broader legislation for the crypto market structure in 2025, the approval of the spot Ethereum ETF may still be delayed until late 2025 or early 2026.
The bank’s report emphasizes the SEC’s ability to easily delay or dismiss ETF applications using standard administrative procedures, suggesting that final decisions could take several more years unless there is significant external influence or political considerations.