By
Chimamanda U. Martha
April 26th, 2024
According to Standard Chartered, an ETH ETF approval will come from the SEC in May, and could possibly pump ETH price to $4,000.
Standard Chartered Bank believes that the United States Securities and Exchange Commission (SEC) will approve spot Ethereum (ETH) exchange-traded funds (ETFs) in May.
Standard Chartered’s Head of Forex and Digital Assets Research, Geoffrey Kendrick, stated in a report that the SEC could approve an ETH ETF because of the Commission’s view of the world’s second-largest cryptocurrency. While authorities consider many cryptocurrencies as securities, Ethereum seems unaffected each time. This could suggest that the SEC’s disposition to Ether may be favorable enough for approval. Another factor in Ether’s favor, according to Kendrick, is that the Chicago Mercantile Exchange (CME) lists ETH futures. He said:
“We expect pending applications for ETH US 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.”
Standard Chartered Says ETH Price Will Benefit from ETF Approval
The Standard Chartered report also believes that there would be less selling pressure on ETH after approval, compared to that seen in Bitcoin. According to the report, this is because the Grayscale Bitcoin Fund (GBTC) had a much larger share of Bitcoin’s market capitalization, than the Grayscale Ethereum Fund (ETHE) has of Ether. Grayscale is hoping to convert its ETF Fund into an ETH ETF as it did for Bitcoin. Standard Chartered believes that a refusal from the SEC would trigger a court appeal similar to the events following the Commission’s refusal for Grayscale’s BTC ETF.
Many have ascribed the SEC’s approval of spot Bitcoin ETFs earlier this month to Grayscale’s court case. The asset management and investment company had sued the SEC for refusing its application, accusing the Commission of applying laws unjustly.
While Standard Chartered expects the SEC to eventually approve ETH ETFs by May, it believes the process will not be straightforward. According to Kendrick’s note, the SEC will begin with a few rejections before granting approval.
Interestingly, investment bank TD Cowen believes differently. The bank states that an ETH ETF will not happen any time soon as it expects the SEC to take its time for several reasons. TD Cowen stated that Gensler is “taking a go-slow approach” because he believes he has time as his tenure does not end until 2026.
In addition to an SEC approval, Kendrick is bullish on the price of ETH, especially with the possibility of an ETF.
“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,” added he.
Bullish on Bitcoin
According to CoinMarketCap data, ETH is trading at $2,335 after climbing nearly 5% over the past week. A jump to $4,000 would be a 71% rise from current levels. Interestingly, Bitcoin jumped from $25,000 in June when BlackRock submitted its application for a spot BTC ETF, to about $47,000 when the SEC eventually granted approval. Standard Chartered expects ETH to “track or outperform Bitcoin during the comparable period.”
Kendrick also believes that the price of Bitcoin will spike. Before the SEC’s approval of spot Bitcoin ETFs, the Standard Chartered exec had previously said that the ETFs would attract up to $100 billion in inflows this year. This could bolster Bitcoin’s price to $100,000 by the end of 2024, and up to $200,000 by the end of next year.