The Standard Chartered Bank anticipates the approval of spot ETFs on Ethereum by the SEC on May 23. The bank projects a potential target of $4,000 for ETH, based on pre-approval performance of BTC.
Let’s see below all the details.
Standard Chartered’s forecasts on the possible approval of Ethereum ETFs
As anticipated, it is expected that the Securities and Exchange Commission (SEC) will adopt a strategy similar to the one used for the approval of Bitcoin spot exchange-traded funds (ETFs), this time for Ethereum ETFs.
This is according to a report from Standard Chartered Bank. The bank indicates that, following a similar path to what happened with the initial denials, the SEC could approve Ethereum spot ETFs by their final deadline on May 23rd.
Geoffrey Kendrick, head of forex and digital asset research at Standard Chartered Bank, stated in a report that it is expected that pending requests for ETH U.S. spot ETFs will receive approval on that date.
Kendrick points out that this date corresponds to the final deadline for the first of the ETFs under examination, similar to January 10th for BTC ETFs.
He has therefore suggested that if the price behavior of ETH will mirror that of BTC before the approval of the ETF on BTC, the value of ETH could reach $4,000 within that period.
Kendrick’s prediction is mainly based on the fact that the SEC has not classified Ether as a security in its legal actions against cryptocurrency companies.
In addition, the listing of ETH as a regulated futures contract on the Chicago Mercantile Exchange provides additional support to this outlook.
He emphasizes that Grayscale, with an ETH trust to be transformed into an ETF, could appeal in case of a rejection, stating that there are no fundamental reasons why the SEC should consider ETH differently than CME.
Kendrick’s optimism for crypto funds and positive prospects for Bitcoin and Ethereum
Geoffrey Kendrick, known for his optimistic perspective on cryptocurrency price movements, maintains a positive outlook, particularly regarding ETFs.
Initially, before the approval of spot Bitcoin ETFs, he predicted that such funds could attract financial flows between 50 and 100 billion dollars this year.
As a result, he had hypothesized that the price of Bitcoin could reach $100,000 by the end of the year and even $200,000 by the end of 2025.
Kendrick has reiterated the feasibility of his $100,000 prediction, emphasizing that the steady inflows into new Bitcoin ETFs will gradually contribute to the increase in the price of the cryptocurrency.
Despite the decrease in the price of Bitcoin immediately after the approval of spot ETFs, mainly due to outflows from the Grayscale Bitcoin Trust (GBTC), the digital currency has rebounded and is currently trading around $43,540.
Kendrick observed that Ether is less susceptible to post-approval sales compared to Bitcoin.
This situation is attributed to the lower share of Grayscale Ethereum Trust in the total ETH market capitalization compared to what GBTC was before the approval of BTC ETFs, with particular emphasis on the shares of FTX which remain even lower.
The approval of ETFs on Ethereum and the influence of network updates
Geoffrey Kendrick, on May 23rd, anticipates the approval of ETFs on Ethereum that simply track the price movements of Ether. However, he suggests that ETFs with staking rewards could be introduced later.
Europe already hosts both types of ETFs, with AETH (21Shares Ethereum Staking ETP) standing out as the largest offering rewards for staking.
Kendrick notes that, despite AETH having higher fees compared to ETH, the staking rewards are balanced by these fees.
Commenting on the highly anticipated Ethereum update to Dencun or Proto-Danksharding, Kendrick predicts a positive impact on the price of Ether.
He indeed argues that the upgrade should increase the value within the ETH ecosystem, as lower Layer 2 fees make ETH more competitive.
In addition, it predicts that the slowdown in staking will maintain higher rewards for a longer period, further benefiting ETH prices.
Overall, cryptocurrency experts express both optimism and pessimism regarding the imminent approval of a spot ETF on Ethereum.