Delays Expected for Ethereum Spot ETFs Approval, says TD Cowen

Delays Expected for Ethereum Spot ETFs Approval, says TD Cowen

The United States Securities and Exchange Commission (SEC) has recently granted approval for Spot Bitcoin ETFs, but according to TD Cowen, a prominent American investment bank and financial service firm, the approval process for Ethereum Spot ETFs might face potential delays. This article will analyze TD Cowen’s predictions and provide insights into the factors that might contribute to the delay in Ethereum Spot ETFs approval.

TD Cowen, the investment bank and financial service division of TD Securities, has forecasted that the US SEC is unlikely to approve Ethereum Spot ETFs by the current deadline. The SEC is obligated to make its final decision on the acceptance or rejection of Ethereum Spot ETF from May 23 to August 7, 2024. While the SEC has already approved Spot Bitcoin ETFs on January 10, triggering expectations for ETH Spot ETFs, TD Cowen believes that the approval process for Ethereum ETFs might not proceed as smoothly.

TD Cowen’s predictions align with the SEC’s typical cautionary approach towards cryptocurrency-related investment products. The investment bank suggests that the regulator might delay ETH Spot ETFs to accumulate sufficient knowledge and experience from the previously approved Bitcoin Spot ETFs. Although the delay might not be as long as 26 months, it is expected to persist beyond the upcoming elections.

Scott Melker, a crypto investor on X (formerly Twitter), has also highlighted the possibility of the SEC hesitating to approve Ethereum Spot ETFs. Melker speculates that Gary Gensler, the current chairman of the SEC, would not entertain an Ethereum Spot ETF unless there are external legal pressures similar to those observed during the approval process of Spot Bitcoin ETFs. This hesitation suggests that the approval of Ethereum ETFs might face additional challenges.

JP Morgan’s Perspective

JP Morgan, an American multinational financial service firm, has introduced another layer of complexity in the approval process of Ethereum Spot ETFs. Nikolaos Panigirtzoglou, Managing Director at JP Morgan, stated that there is a 50% chance of the US SEC approving these Spot ETFs by its May deadline. Panigirtzoglou highlights that the SEC would need to classify ETH as a commodity, similar to Bitcoin, before officially granting authorization for Spot Ethereum ETFs. This classification process might contribute to the delay in approval.

In contrast to the cautious predictions, Bloomberg senior analyst, Eric Balchunas, is more optimistic about Ethereum Spot ETF approvals. Balchunas discloses a 70% chance of the SEC approving ETH Spot ETFs. He believes that the SEC would not approve Spot Bitcoin ETFs and reject Ethereum Spot Bitcoin ETFs, emphasizing the potential for a positive outcome for the Ethereum market.

The approval process for Ethereum Spot ETFs is expected to face delays, according to TD Cowen. The cautious approach of the SEC, external legal pressures, classification challenges, and the upcoming elections are all contributing factors to the potential delay. However, there is still optimism in the market, as indicated by Bloomberg’s senior analyst, Eric Balchunas. Investors and enthusiasts will closely monitor the SEC’s decision as it will have a significant impact on the future of Ethereum as an investment product.


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