TD Cowen Projects Spot Ethereum ETF Approval Unlikely Until Late 2025 or Early 2026

A recent The Block report states that investment bank TD Cowen has outlined a more defined timeline for the potential approval of a spot Ethereum (ETH) exchange-traded fund (ETF) in the United States, projecting it to occur in late 2025 or early 2026. In a recent note, the TD Cowen Washington Research Group, led by Jaret Seiberg, emphasized that a spot Ethereum ETF approval by the SEC in 2024 is unlikely, citing political considerations. The bank suggests that SEC Chair Gary Gensler is cautious due to potential backlash from progressive Democrats, particularly following the approval of a spot Bitcoin ETF earlier. TD Cowen indicates that Gensler, seeking progressive support for his agenda in an election year, is unlikely to provoke unnecessary conflict.

The bank highlights that Gensler may prefer a gradual approach, wanting more experience with the recently approved spot Bitcoin ETFs before considering an Ethereum ETF. TD Cowen notes that numerous companies, including BlackRock and Fidelity, have applied for a spot Ethereum ETF, with the SEC recently delaying its decision on Grayscale Investments' proposal. The bank believes the SEC can take its time reviewing spot Ethereum ETF applications, and a rejection could lead to either a new application or litigation, extending the process for another year or two.

TD Cowen maintains the late 2025 or early 2026 approval deadline even if broader crypto market structure legislation is not enacted by Congress in 2025. Gensler's term is set to end in June 2026. While there is a range of opinions among crypto experts about the timing of a spot Ethereum ETF approval, TD Cowen suggests a cautious and incremental approach in regulatory approvals or clarity from Gensler, aligning with his broader stance on crypto.

Resources:

The Block