Standard Chartered Doubts May Approval for Spot ETH-ETFs

Investment bank Standard Chartered has revised its optimistic forecast regarding spot Ethereum-ETFs, now expressing doubt that the SEC will approve the instrument in May. This was reported by CoinDesk citing the company’s report. 

Previously, analysts anticipated a positive decision on the exchange-traded funds based on the second-largest cryptocurrency by market capitalization by May 23. 

“The assumption was based on the belief that the approval process would follow the trajectory of bitcoin-ETFs, and that there would be constructive dialogue between the SEC and fund issuers. However, discussions have not yet occurred, at least publicly,” stated the bank’s head of research, Geoffrey Kendrick.

On April 23, the SEC postponed its decision on the spot Ethereum-ETF from Franklin Templeton, extending the deadline to June 11. Prior to this, the regulator extended the review period for a similar application from BlackRock. 

Experts also highlighted other negative factors such as the Commission’s investigation into the decentralized exchange Uniswap, rising U.S. Treasury yields, the postponement of the Fed‘s base rate cut, and the crypto market correction amid escalating conflict in the Middle East. 

However, according to Standard Chartered’s report, the bad news is already priced into bitcoin and Ethereum. The company expects that “positive structural drivers” will once again prevail. 

Additionally, the bank confirmed its previous target for the end of 2024, with bitcoin at $150,000 and ETH at $8,000. 

State of Bitcoin Funds

The report noted that inflows into spot bitcoin-ETFs have recently slowed due to macroeconomic and geopolitical reasons. 

According to Standard Chartered analysts, the first wave of purchases of the instrument has likely concluded. This suggests that a strong positive market driver is currently “stalled.” 

The next growth phase will involve the inclusion of ETFs based on the first cryptocurrency into broader macro funds, but this may take some time, the bank noted.

According to SoSoValue, spot bitcoin exchange-traded funds in the U.S. recorded net inflows for three consecutive days, following five days of outflows. 

On April 23, the figure was $31.64 million. GBTC from Grayscale showed a net outflow of $66.88 million, while IBIT from BlackRock added $37.92 million.

Since the launch of bitcoin-ETFs in January, the products have recorded a total inflow of $12.42 billion. The total value of assets under management by fund issuers is approximately $55.82 billion. 

It is worth noting that GBTC crypto assets halved in about three months following conversion into a spot ETF.