American Investment Bank TD Cowen Says Ethereum ETF Will Be Delayed

Despite the United States Securities and Exchange Commission (SEC) granting approval for Spot Bitcoin ETFs, TD Cowen, a prominent American investment bank and financial service firm, foresees potential delays in the approval process of Ethereum Spot ETFs. 

TD Cowen, an investment bank and financial service division of TD Securities has made a bold forecast, predicting that the US SEC is unlikely to approve Ethereum Spot ETFs before its deadline. Presently, the SEC is obligated to make its final decision on its rejection or acceptance of Ethereum Spot ETF from May 23 to August 7, 2024. 

Earlier on January 10, the SEC officially approved Spot Bitcoin ETFs, triggering expectations that ETH Spot ETFs would follow suit. Several major firms including Ark 21 Shares, VanEck, Fidelity, BlackRock, and Hashdex have submitted applications for a Spot Ethereum ETF. Additionally, the regulatory agency has fixed a new deadline for Grayscale’s Ethereum Spot ETF to January 25. 

TD Cowen’s predictions align with the SEC’s typical cautionary approach towards cryptocurrency-related investment products. The investment bank has disclosed that the regulator may delay ETH Spot ETFs until it accumulates sufficient knowledge and experience from its previously approved Bitcoin Spot ETFs. The bank estimates that while the delay may not take as long as 26 months, it is likely to persist beyond the upcoming elections.

Similarly, Scott Melker, a crypto investor on X (formerly Twitter) has highlighted the possibility of the SEC hesitating to approve Ethereum Spot ETFs. Melker predicted that the SEC would be reluctant to approve Ethereum ETFs without external legal pressures similar to those observed during the approval process of Spot Bitcoin ETFs. 

“Gary Gensler isn’t going to entertain an Ethereum Spot ETF unless the courts force it on him. I very seriously doubt we will see one anytime soon, but would love to be proven wrong,” Melker stated. 

JP Morgan, an American multinational financial service firm has introduced another layer of complexity in the approval process of Ethereum Spot ETFs. Managing Director at JP Morgan, Nikolaos Panigirtzoglou stated that there was a 50% chance of the US SEC approving these Spot ETFs by its May deadline. 

Panigirtzoglou revealed that the SEC would need to classify ETH as a commodity, similar to Bitcoin before it can officially grant authorization for Spot Ethereum ETFs. 

In contrast, Bloomberg senior analyst, Eric Balchunas is more optimistic on Ethereum Spot ETF approvals. The analyst has disclosed a 70% chance of the SEC approving ETH Spot ETFs. Balchunas said previously that he could not imagine a scenario where the SEC would approve Spot Bitcoin ETFs and reject Ethereum Spot Bitcoin ETFs.