According to Kitco’s report on January 29, TD Cowen’s Washington research group predicts that the Ethereum ETF spot will not be approved this year.
The U.S. Securities and Exchange Commission (SEC) must decide soon on proposed rule changes to allow spot Ethereum ETFs to be listed and traded on stock exchanges. TD Cowen believes approval is unlikely, stating:
“[The SEC] The rule change could ultimately be denied, which would either result in a new filing or lawsuit…or take a year or two to play out. “
In this scenario, any possible Ethereum ETF spot approval is unlikely to materialize before the end of 2025 or early 2026, the research group said.
The SEC has until May 23 to make a decision on VanEck’s spot ethereum ETF application, but does not need to approve the fund. Securities agencies are expected to make decisions on similar applications at the same time.
Other sources are divided on whether approval in May is possible. A prediction market from Polymarket put the chance of approval at 47%, while a senior executive at JPMorgan Chase put the chance of approval at 50%. Bloomberg ETF analyst James Seyffart is slightly more optimistic, estimating a 60% chance of approval.
Political factors are at play
TD Cowen said its lower approval expectations were based on partisan attitudes towards cryptocurrencies. The research team wrote:
“This is a political call. We believe there is nothing wrong with SEC Chairman Gary Gensler’s approval of a spot Ethereum ETF, given progressive Democrats’ dissatisfaction with the agency’s approval of a spot Bitcoin ETF. benefit. earlier this month”.
TD Cowen notes that SEC Chairman Gary Gensler, a Democrat, needs the support of progressives to advance his agenda or potentially secure a different government position if President Joe Biden wins re-election. It hinted that approving a spot ETF would involve “unnecessary struggles” and that Gensler might be “in no rush” to approve such funds.
As TD Cowen observes, Democrats are generally opposed to early approval of a spot Bitcoin ETF. Within the SEC, two Democratic commissioners voted against approving a spot Bitcoin ETF, while two Republican commissioners voted in favor of approval. Gensler voted for approval despite being a member of the Democratic Party and having broader concerns about cryptocurrencies.
Outside the SEC, Democratic Senator Elizabeth Warren expressed dissatisfaction with the January 12 decision to approve a spot Bitcoin ETF.
