FameEX Hot Topics | Standard Chartered Anticipates SEC's Approval of Spot Ethereum ETFs in May, Predicts Surge in ETH Value to $4,000

Standard Chartered, a major banking institution, has forecasted that the U.S. Securities and Exchange Commission (SEC) is likely to approve spot Ethereum exchange-traded funds (ETFs) by May. This anticipation, as reported by Bloomberg, stems from a recent note published by the bank's crypto research head, Geoff Kendrick. Kendrick, who also oversees Western emerging markets FX, expects the SEC's decision-making process for ethereum ETFs to align with its handling of spot Bitcoin ETF approvals.

Kendrick points to May 23 as a critical deadline for the SEC to either approve or reject spot ethereum ETF applications from Vaneck and Ark 21shares. He predicts the decision will come on this final date, drawing a parallel to the SEC's Jan. 10 approval of 11 spot bitcoin ETFs. His projection is based on the legal and financial similarities between ethereum and bitcoin, suggesting that ethereum ETFs might follow a similar approval trajectory.

Despite SEC Chairman Gary Gensler's reluctance to classify ethereum as a security (while stating that most crypto tokens, barring bitcoin, are securities), the SEC recently delayed decisions on two spot ethereum ETF applications, one from Blackrock and another from Grayscale Investments.

Kendrick believes that ethereum's price could soar to $4,000 by the May 23 approval deadline, mirroring bitcoin's price movement during its ETF approval phase. As of the report, ether is trading at $2,370. This price target is contingent on several assumptions: low general market expectations for approval, incorrect implied volatility projections, and the possibility of the SEC approving multiple spot ethereum ETFs simultaneously, as it did with bitcoin ETFs.

The post-approval market behavior for ethereum is also a focus. While bitcoin experienced a selloff post its ETF approvals, with notable exits from the Grayscale Bitcoin Trust (GBTC) by investors like FTX, Standard Chartered posits that ethereum might be less susceptible to a similar downturn. This expectation is due to the comparatively smaller market capitalization share of Grayscale's existing Ethereum Trust in relation to the total ether market, versus bitcoin's share in GBTC.

Kendrick emphasizes that these factors should render ETH less vulnerable to a post-approval selloff than BTC. This optimistic outlook on ethereum coincides with Standard Chartered's early-month prediction that bitcoin could reach a staggering $200K by 2025, showcasing the bank's bullish stance on the future 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.