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 Ether 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 Ether 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 a legal challenge from Grayscale Investments, the federal court left the SEC with no choice but to approve these funds. Gensler stated, “While we approved several Bitcoin spot ETP stocks for listing and trading 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 the bank’s view that Gensler is taking a slow approach similar to the institution’s rule-making for the ABS market. The bank also noted that this approval will not expedite the timeline for cryptocurrency market structure legislation.
According to TD Cowen, Gensler’s term will end in June 2026, during which time he may maintain a majority of Democratic seats at the SEC. The bank stated, “This is another reason we think Gensler is not rushing to take action,” and added that Gensler has time to bring more cases and await more court rulings rather than trying to push legislative action quickly.
Morgan Stanley: Probability not exceeding 50%
Following the approval of Bitcoin spot ETFs, traders are now betting that an Ether spot ETF may be the next approved product, with the price of Ether (ETH) rising over 10% in the past week. According to a previous report by Zombit, Bloomberg ETF analyst Eric Balchunas believes that the likelihood of an Ether spot ETF being approved in May this year is as high as 70%, while Standard Chartered predicts the approval timing to be in the second quarter of this year.
However, apart from TD Cowen, there are also other analysts who are not optimistic about the approval of an Ether spot ETF in the short term. Morgan Stanley analyst Nikolaos Panigirtzoglou stated in an interview with “The Block” last week that:
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