In a report released on Tuesday this week, Standard Chartered Bank has predicted the approval of an Ethereum spot ETF (Exchange-Traded Fund) in May 2024. The bank, renowned for its insightful market analyses, foresees a bullish run for Ethereum, projecting a potential surge of 70% from its current value, propelling it to a staggering $4,000 by May.
Earlier this month, Standard Chartered forecasted that the approval of Spot Bitcoin Exchange Traded Funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) could lead to a rise in the price of Bitcoin to $200,000 next year, compared with an earlier prediction of $120,000 it made last July. The bank’s analysts characterised this development as a pivotal moment for standardising institutional involvement in Bitcoin, anticipating that the approval would stimulate substantial inflows and contribute to upward price movements for Bitcoin.
Geoff Kendrick, the head of Standard Chartered Bank’s research team, spearheads this optimistic outlook. Drawing parallels with Bitcoin’s trajectory, Kendrick suggests that the SEC may follow a similar pattern to its handling of Bitcoin ETFs. The SEC is expected to initially reject the issuer and subsequently grant approval. The tentative date for the delayed approval of the spot Ethereum ETF is set for 23 May.
Quoting from the report under the subheading ‘History doesn’t repeat itself, but it often rhymes,’ Kendrick states, “pending applications for ETH U.S. spot ETFs to be approved on May 23, the final deadline for the first of the ETFs under consideration — the equivalent date to Jan. 10 for BTC ETFs. If ETH prices perform similarly to BTC prices in the lead-up to BTC ETF approval, ETH could trade as high as $4,000 by then.”
The report emphasises that there is “no fundamental reason” for the SEC to treat Ethereum differently than Bitcoin, especially considering that ETH futures are already listed on the regulated Chicago Mercantile Exchange (CME).
While Standard Chartered Bank exudes confidence in the imminent approval, a recent report from TD Cowen’s Washington Research Group presents a contrary view. It suggests that the delay in approving spot Ethereum ETFs may be influenced by political pressure on SEC Chair Gary Gensler. TD Cowen predicts a more extended timeline for approval, estimating that spot Ethereum ETFs are likely to be approved between 2025-2026, with this year being the least probable. The report posits that Gensler, facing political considerations with the approaching U.S. elections in November 2024, might opt for caution and delay the approval.
In line with its optimistic outlook, Standard Chartered expects Ethereum prices to closely track or potentially outperform Bitcoin as the approval date approaches. The report draws parallels to Bitcoin’s surge of 85% following ETF approval. Interestingly, the report suggests that Ethereum might encounter less selling pressure post-ETF approval compared to Bitcoin. This is attributed to the Grayscale Ethereum Fund (ETHE) having a smaller market share of Ether’s capitalisation than the Grayscale Bitcoin Fund (GBTC), with fewer shares held by the FTX bankruptcy estate.
As speculations around the date of Ethereum spot ETF approval circulate the market, it is evident that anticipations are diverse and varied. Despite differing opinions, market participants seem confident in the inevitability of Ethereum ETF approvals, regardless of the timeline. The evolving landscape of cryptocurrency regulations and the anticipation of institutional adoption underscore the significance of these developments. Crypto enthusiasts are eagerly awaiting the SEC’s decision and its potential impact on the Ethereum market. 23 May 2024 looms large as a crucial date that could shape the future trajectory of Ethereum and influence broader sentiments in the crypto space.
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