Divergent Views on Spot Ether ETF Approval: Some Late 2025, While Optimism Grows for May 2024.

Investment bank TD Cowen's recent projections foresee a delay in the approval of a spot ether exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) until late 2025 or early 2026. However, amidst this cautious outlook, Bloomberg Intelligence analyst James Seyffart provides a more optimistic perspective, suggesting a roughly 60% chance of spot ether ETF approval in May.

The SEC's recent decision to delay approvals for potential BlackRock and Grayscale ether ETFs did not come as a surprise to industry experts, who anticipate the SEC's deferment of a decision on these ETFs until later in the year. This follows the SEC's approval earlier in the month of several bitcoin ETFs.

Seyffart identifies May 23 as a critical date to watch in the spot ether saga, marking the 240-day window for the SEC to decide on proposals from Ark/21Shares and VanEck. Expressing a base case of a 60% likelihood of approval around that date, Seyffart acknowledges potential delays but remains optimistic about the approval prospects.

If the anticipated May approval does not materialize, Seyffart plans to shift his focus to 2025. Grayscale is adopting a similar approach, aiming to convert the Grayscale Ethereum Trust (ETHE) into an ETF. Chief Legal Officer Craig Salm mentioned a target decision date in the summer of 2024, paralleling their strategy with the bitcoin ETF application.

Scott Johnsson, a general partner at Van Buren Capital, cautioned against assuming spot ETF approval, emphasizing the nuanced landscape. Despite uncertainties, he believes that, in the long term, approval for spot ether ETFs is almost guaranteed. However, Seyffart notes that the SEC could ask potential issuers to withdraw applications or issue denials in May, indicating the SEC's intentions.

The existence of ether futures ETFs is considered a positive factor by Johnsson for potential spot ETF approval, aligning with the SEC's approval basis for bitcoin ETFs. As May approaches, market observers will be closely watching for clues, including filings and responses from issuers and the SEC, to gauge the regulatory landscape. While TD Cowen takes a cautious stance, the divergence in opinions reflects the ongoing uncertainty regarding spot ether ETF approval.