The U.S. Securities and Exchange Commission (SEC) is expected to approve an ETF based on the spot price of Ethereum by late 2025 or early 2026, according to investment bank TD Cowen, reports The Block.
Analysts believe a positive decision from the SEC is unlikely this year.
“This is a political call. We believe SEC Chairman Gary Gensler has no chance of approving a spot Ethereum ETF, given how upset progressive Democrats are over the [decision] on the Bitcoin ETF,” the report states.
TD Cowen suggested that the head of the regulator “needs the support of progressives,” including for his future political ambitions. Therefore, the bank believes there is “no reason to provoke an unnecessary fight.”
“We are overly cautious, as we believe Gensler is still reluctant to approve an Ethereum ETF, as he would first like to gain more experience with the recently approved spot Bitcoin ETFs,” the analysts explained.
Analysts expressed a similar view in early January. At that time, TD Cowen suggested that the approval of the instrument might occur after the U.S. elections scheduled for November 5, 2024.
Previously, Morgan Creek Capital CEO Mark Yusko assessed the chances of a swift approval of an Ethereum ETF as less than 50%. The expert noted the SEC’s hostility towards the industry as a whole.
JPMorgan analyst Nikolaos Panigirtzoglou shares a similar position. FOX Business predicted the instrument’s approval by summer 2024.
Earlier, BlackRock CEO Larry Fink recognized the value in a spot Ethereum ETF. In his view, it is “just a stepping stone to tokenization.”