FameEX Hot Topics | Standard Chartered Foresees SEC Greenlighting Spot Ethereum ETFs by May, Projects Ethereum's Price to Hit $4,000

Standard Chartered, a prominent global banking institution, is projecting that the U.S. Securities and Exchange Commission (SEC) will likely approve spot Ethereum Exchange-Traded Funds (ETFs) by May 2024. This forecast comes from Geoff Kendrick, the head of crypto research at Standard Chartered, who also manages Western emerging markets FX. According to a Bloomberg report, Kendrick's analysis draws parallels between the SEC’s historical decisions on spot Bitcoin ETFs and the anticipated outcome for Ethereum ETFs.

Kendrick has pinpointed May 23, 2024, as a decisive date for the SEC, by which it must either greenlight or reject spot Ethereum ETF applications submitted by financial institutions like Vaneck and Ark 21shares. He suggests that the SEC is likely to delay its decision until this final date, mirroring its earlier pattern of approving 11 spot Bitcoin ETFs on January 10, 2024. Kendrick's hypothesis is based on the legal and financial frameworks surrounding both Ethereum and Bitcoin, indicating that Ethereum ETFs may experience a similar approval pathway.

Notably, SEC Chairman Gary Gensler has been reticent to classify Ethereum as a security, though he acknowledges that most crypto tokens, apart from Bitcoin, fit into this category. This stance was evident when the SEC recently postponed its decision on two separate spot Ethereum ETF applications, one from Blackrock and the other from Grayscale Investments.

Kendrick anticipates that Ethereum's price could escalate to $4,000 by the May 23 deadline. This forecast correlates with the trends observed in Bitcoin’s pricing during its ETF approval phase. At the time of this report, Ethereum trades at approximately $2,370. Kendrick’s projection hinges on several factors: subdued general market expectation for approval, misjudged implied volatility, and the possibility that the SEC may approve several spot Ethereum ETFs simultaneously, as it did with Bitcoin.

In the context of post-approval market dynamics, Kendrick believes that Ethereum may not undergo the same level of selloff that Bitcoin experienced following its ETF approvals. This perspective is based on the relative market capitalization of Grayscale's Ethereum Trust against the overall Ethereum market, which is smaller in comparison to Bitcoin's share in GBTC.

Kendrick emphasizes that these elements may make Ethereum less susceptible to a post-approval selloff compared to Bitcoin. This bullish perspective on Ethereum aligns with Standard Chartered's recent prediction that Bitcoin's price could soar to an impressive $200,000 by 2025, highlighting the bank’s optimistic view on the future trajectory of major cryptocurrencies.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.