British multinational bank Standard Chartered has predicted that the price of ether (ETH), the industry’s second-largest digital coin, could soar over 71% from current levels and reach the elusive $4,000 mark by May as pending applications for spot ETH exchange-traded funds (ETF) will likely secure the green light in the United States.
Ethereum ETFs Coming In May?
After the launch of spot Bitcoin ETFs, the industry has now turned to the regulatory approval of an Ether.
Standard Chartered analysts led by research head Geoff Kendrick believe that the U.S. Securities and Exchange Commission (SEC) — as it did with BTC — will start with rejections and delays but ultimately rubberstamp the investment product on the initial final deadline on May 23, 2024.
At the moment, there are at least seven spot ether ETF applications on the SEC’s desk. This time, asset manager VanEck is the first in line with the May 23 deadline. The deadline for BlackRock’s filing is in August, but while normally we would expect the Wall Street titan to dictate the terms of the green light, the regulator has already initiated proceedings on VanEck’s filing.
According to the billion-dollar bank, the market presently underestimates the likelihood of approval. The bank’s analysts see “no fundamental reason” for the SEC to treat ether differently than Bitcoin, pointing out that ETH is already listed as a regulated futures contract on the Chicago Mercantile Exchange (CME) and the SEC has not classified ETH as a security in its legal actions against Coinbase and Binance.
“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,” Kendrick and team added.
In his statement after the Bitcoin ETF approvals earlier this month, SEC chair Gary Gensler astutely indicated that Bitcoin’s status as a “non-security commodity” was one of the reasons why the agency was comfortable greenlighting the investment vehicle.
However, Gensler has previously declared that the majority of crypto assets, besides Bitcoin, qualify as investment contracts and are thus subject to federal securities laws.
StanChart Tips $4,000 ETH By May
Standard Chartered predicts a significant market impact from the SEC’s approval of United-States-listed spot ETH ETFs.
“Heading into the expected approval date on May 23, we expect ETH prices to track, or outperform, bitcoin (BTC) during the comparable period,” the banking executives said.
The price of Bitcoin rocketed more than 80% from around $25,000 in mid-June, when BlackRock officially applied for an ETF with the SEC, to nearly $49,000 after the spot ETFs went live on Jan. 11.
The bank noted that ETH would see significantly less selling pressure after a potential ETF makes its debut compared to BTC since the Grayscale Ethereum Fund (ETHE) has a smaller market share of ETH market cap than the Grayscale Bitcoin Fund (GBTC), with even fewer shares owned by the now-defunct FTX exchange.
ETH is currently trading for $2,339, having gained 0.7% on the past day and 3.8% in the past week, according to CoinGecko data.
