The head of forex and digital assets research at Standard Chartered believes that the Securities and Exchange Commission (SEC) may give approval to a spot Ethereum ETF by May 23. Standard Chartered Bank has also made a prediction that Ethereum (ETH) could potentially reach a value of $4,000 if it follows a similar trajectory as Bitcoin (BTC) did before its approval.
Standard Chartered Bank suggests that the SEC is likely to adopt a similar approach for spot Ethereum ETFs as it did for spot Bitcoin ETFs. The bank anticipates initial rejections by the SEC, followed by eventual approval on the set deadline of May 23. Geoffrey Kendrick, the head of research at Standard Chartered Bank for forex and digital assets, expressed this expectation in a report released on Tuesday, stating:
“We anticipate that pending applications for U.S. spot ETFs for ETH will receive approval on May 23, which is the final deadline for the first of these ETFs under consideration. This is equivalent to the date of January 10 for BTC ETFs. If ETH performs similarly to how BTC did leading up to its ETF approval, we could see ETH trading as high as $4,000 by that time.”
Kendrick also suggests that the SEC could approve a spot Ethereum ETF based on the fact that Ethereum has not been categorized as a security in legal actions taken against various crypto entities. Furthermore, the inclusion of ETH as a regulated futures contract on the Chicago Mercantile Exchange lends credibility to the possibility of a spot Ethereum ETF approval. Kendrick explained, “Grayscale also seeks to transform its ETH trust into an ETF, so a rejection of that application would likely result in an appeal by Grayscale. We see no fundamental reason for the SEC to treat ETH differently from how the CME already does.”
Kendrick holds an optimistic view regarding the price of ETH following its approval, suggesting that it could reach $4,000 by the approval date. However, it is worth noting that Kendrick maintains an overall optimistic outlook on the cryptocurrency market, especially in terms of price trends. He previously predicted significant inflows of $50-100 billion into Bitcoin due to the approval of spot Bitcoin ETFs, potentially driving its price to $100,000 by the end of 2024 and even $200,000 by the end of 2025.
“We expect Bitcoin to experience price gains of a similar magnitude following the approval of U.S. spot ETFs, but we believe these gains will occur over a shorter period of one to two years, given our expectation of a faster development in the BTC ETF market. This aligns with our end-2024 projection of Bitcoin reaching $100,000. If ETF-related investments materialize as we anticipate, a level near $200,000 by the end of 2025 seems plausible. This assumption considers that between 437,000 and 1.32 million new bitcoins will be held in U.S. spot ETFs by the end of 2024, translating to approximately $50-100 billion in USD terms.”
Kendrick asserts that the $100,000 price target remains attainable, as the expected influx of funds into spot Bitcoin ETFs could contribute to Bitcoin’s price increase. Despite a drop in Bitcoin’s price following the approval of spot Bitcoin ETFs, largely attributed to significant outflows from the Grayscale Bitcoin Trust (GBTC), the price has since rebounded and currently hovers just below the $43,000 mark.
Moreover, Kendrick suggests that the price of ETH is less likely to experience a significant drop post-approval because Grayscale’s Ethereum Trust is considerably smaller compared to its Bitcoin Trust. This means that any potential sell-off would have a less pronounced impact on the price of Ethereum. Kendrick also points out that the forthcoming Ethereum upgrade could have a positive influence on ETH’s price.