Since the first Bitcoin (BTC) spot exchange-traded funds (ETFs) were approved in the US on January 10th, the market is already looking forward to the next industry milestone.
This could well be the approval for the next spot ETFs in the crypto sector, namely those for Ethereum (ETH).
However, a major investment bank doubts this. She fears that such approval will be several years away.
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The excitement over the upcoming Ethereum ETF decisions
Most recently, the US Securities and Exchange Commission (SEC) had already postponed decisions on several applications for spot Ethereum ETFs.
This came as no surprise: the SEC also postponed its decision on Bitcoin ETFs until the very last minute. Therefore, the market assumes that the SEC will not announce its decision until the end of May.
Since the SEC recently approved Bitcoin ETFs and futures ETFs on Ethereum late last year, it is likely that it will also approve one or more spot ETFs on Ethereum this time.
It was recently reported on Crypto Insiders that several major banks are less positive about this. For example, JPMorgan estimates the chance of approval in May is less than 50%.
TD Cowen, another major US bank, said at the time that an Ethereum ETF would not be approved until after the upcoming US presidential election in November.
TD Cowen doesn’t expect an Ethereum ETF for another year or two
In a new release, researchers at TD Cowen report that they do not expect approval this year. There is a political reason behind this, say researchers at the TD Cowen Washington Research Group:
“We do not expect the SEC to approve a spot Ethereum ETF in 2024. This is a political decision.
We believe there is no upside for SEC Chairman Gary Gensler to approve a spot Ethereum ETF given how upset progressive Democrats were with the agency’s approval of a spot Bitcoin ETF earlier this month.”
The bank reports that the SEC is in no rush to make a decision on the Ethereum ETFs. According to the researchers, the regulator first wants to see how Bitcoin ETFs perform, and this is in line with the SEC’s slow approach to cryptocurrencies.
The SEC will ultimately reject the applications, leading to new applications or perhaps even a lawsuit. “Each of these processes will take an additional year or two,” said the researchers.
This means we won’t see a spot ETF for Ethereum until late 2025 or early 2026.
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