Published
3 months ago on
January 31, 2024
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Standard Chartered’s head of forex and digital assets research believes that the Securities and Exchange Commission could approve a spot Ethereum ETF by May 23.
The bank has also predicted ETH could reach $4000 if it mimics Bitcoin’s (BTC) pre-approval performance.
Spot Ethereum ETF Approval On The Cards?
According to Standard Chartered Bank, the Securities and Exchange Commission is expected to take the same strategy it used for the spot Bitcoin ETFs when it comes to spot Ethereum ETFs. The bank predicted that the SEC would start with rejections before ultimately granting approval on the initial deadline of May 23. Geoffrey Kendrick, the head of Standard Chartered Bank’s forex and digital assets research, wrote in a report published on Tuesday,
“We expect 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 how BTC prices performed in the lead-up to BTC ETF approval, ETH could trade as high as $4,000 by then.”
According to Kendrick, a spot Ethereum ETF could be approved on the grounds that the Securities and Exchange Commission has not classified ETH as a security in legal actions taken against several crypto entities. Additionally, the listing of ETH as a regulated futures contract on the Chicago Mercantile Exchange added weight to the fact that a spot Ethereum ETF could end up being approved.
“Grayscale also has an ETH trust that it wants to turn into an ETF, so a denial of that application would likely lead to another appeal by Grayscale. We see no fundamental reason for the SEC to view ETH differently than the CME already does.”
Optimism About ETH Price
Kendrick was also optimistic about the price of ETH following approvals, adding that he believed the price of ETH could reach $4000 by the time of the approval date. However, Kendrick holds a generally optimistic outlook on crypto, especially regarding price trends. Before the approval of the spot Bitcoin ETFs, Kendrick had stated that the funds could see inflows of around $50-100 billion over the course of the year. As a result, the price of Bitcoin could surge to $100,000 by the end of 2024 and $200,000 by the end of 2025.
“We expect bitcoin to enjoy price gains of a similar magnitude as a result of U.S. spot ETF approval, but we see these gains materializing over a shorter (one- to two-year) period, given our view that the BTC ETF market will develop more quickly. This is consistent with our end-2024 view of Bitcoin at the $100,000 level. If ETF-related inflows materialize as we expect, we think an end-2025 level closer to $200,000 is possible. This assumes that between 437,000 and 1.32 million new bitcoins will be held in spot U.S. ETFs by the end of 2024. In USD terms, this should be roughly $50-100 billion.”
Kendrick stated in the new report that the $100,000 price prediction still looked achievable, given that expected inflows into spot Bitcoin ETFs could help increase the price of Bitcoin. The Bitcoin price saw a drop following the approval of spot Bitcoin ETFs. This was attributed to large outflows from the Grayscale Bitcoin Trust (GBTC). However, the price has since recovered, with Bitcoin trading just under the $43,000 mark.
Kendrick added that he did not expect the price of ETH to drop much following approval because Grayscale’s Ethereum Trust is much smaller compared to its Bitcoin Trust. This means any potential selloff would not profoundly impact the price. He also said that the upcoming Ethereum upgrade could positively impact the price of ETH.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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