According to a report from “The Block,” investment bank TD Cowen believes that the U.S. Securities and Exchange Commission (SEC) will not approve an Ethereum spot ETF in the short term. The TD Cowen Washington Research Group, led by Jaret Seiberg, stated in a report last week that several large companies, including BlackRock and Fidelity, have recently submitted applications for Ethereum spot ETFs, with the first deadline for reviewing such funds set for May.
While approving Bitcoin spot ETFs, SEC Chairman Gary Gensler indicated that due to the SEC’s loss in a legal battle initiated by Grayscale Investments, the federal court left the SEC with little choice but to approve these funds. Gensler stated at the time, “While we have approved the listing and trading of several Bitcoin spot ETP shares today, we have not approved or endorsed Bitcoin,” and added that he maintains his view that “the vast majority of crypto assets are investment contracts and therefore fall under federal securities laws.”
TD Cowen stated that the approval of Bitcoin spot ETFs aligns with their view that Gensler is taking a slow approach akin to the one the institution took in setting rules for the ABS (asset-backed securities) market. The bank also mentioned that this approval will not “accelerate the timetable for cryptocurrency market structure legislation.”
According to TD Cowen, Gensler’s term will end in June 2026, during which he may maintain a majority of Democratic seats at the SEC. The bank noted that this is another reason why they believe Gensler is not rushing to take action, as he has time to bring more cases and await further court rulings instead of trying to push legislative action hastily.
In conclusion, TD Cowen stated that Morgan Stanley estimates the likelihood of approval for an Ethereum spot ETF to be no more than 50%. Traders are now betting on an Ethereum spot ETF being the next approved product after the Bitcoin spot ETF, with the price of Ethereum (ETH) rising by over 10% in the past week. Bloomberg ETF analyst Eric Balchunas previously reported that the likelihood of an Ethereum spot ETF being approved in May this year could reach 70%, while Standard Chartered Bank predicts approval in the second quarter of this year.
However, apart from TD Cowen, there are other analysts who are not optimistic about the approval of an Ethereum spot ETF in the short term. Morgan Stanley analyst Nikolaos Panigirtzoglou stated in an interview with “The Block” last week that: