Standard Chartered Predicts SEC Approval of Spot Ethereum-ETF in May

The SEC is expected to approve spot Ethereum-ETFs on May 23, by which time the price of the second-largest cryptocurrency by market capitalization could reach $4000, according to a forecast by Standard Chartered, reports The Block.

Analysts based their growth target on the situation with Bitcoin following the approval of a spot exchange-traded fund based on it. They noted that the regulator is likely to follow the same strategy with Ethereum.

May 23 marks the first final deadline for decisions on applications for the launch of instruments from VanEck and Ark/21Shares.

Experts are betting on the approval of spot Ethereum-ETFs due to the absence of the second-largest cryptocurrency being classified as a security in SEC lawsuits. The listing of a regulated futures contract on the CME adds weight to these expectations, they added.

“Grayscale also has an ETH trust, which the company intends to convert into an ETF. A rejection of this application is likely to lead to another appeal. Therefore, we see no fundamental reasons for the SEC to treat Ethereum differently than CME already does,” the report states.

Earlier this year, Standard Chartered estimated that inflows into a spot Bitcoin-ETF could reach $50-100 billion by the end of 2024, potentially driving the price of digital gold to $100,000 and doubling again in the following year, as reported by Forklog.

In the new report, experts described these targets as “still achievable.”

They noted the low susceptibility of the second-largest cryptocurrency to the negative dynamics of digital gold that followed the approval of the exchange-traded fund.

“The key reason for this is that the Grayscale Ethereum Trust has a smaller share of the total market capitalization of Ethereum than the GBTC did before the approval of the Bitcoin-ETF. The impact of FTX sales is even lower,” they explained.

Analysts also mentioned the upcoming Denсun update as a potential driver.

Experts anticipate the approval of “simple” spot Ethereum-ETFs on May 23, which do not account for staking rewards. They expect the registration of products with this option later.

As reported by FOX Business, SEC staff may delve into the study of S-1 applications in the coming months, as they did with proposals for launching spot Bitcoin-ETFs. This would signal a positive decision in the future.

Previously, BlackRock CEO Larry Fink stated that he “sees value” in a spot Ethereum fund, calling it a step towards tokenization.