Standard Chartered is awaiting the SEC decision on May 23.
Standard Chartered Bank If the SEC approves the U.S. spot Ethereum ETF on May 23, it paints an optimistic picture for Ethereum, with expectations that the value of Ethereum will rise significantly. Geoffrey Kendrick, head of foreign exchange and digital assets research at the bank, predicted this. This is a pivotal moment for Ethereum, similar to the historical timeline of Bitcoin ETF acceptance.
SEC’s Position Evolving: Echoes of the Bitcoin ETF Journey
The SEC’s strategy in approaching the Ethereum ETF mirrors the trajectory observed for the Bitcoin ETF, starting with initial rejection and ending with final approval. Kendrick suggests that compared to January 10th, a significant milestone for Bitcoin, the price of Ethereum could potentially surge to $4,000, matching the pattern seen prior to Bitcoin’s ETF approval phase.
Kendrick’s optimism stems from the SEC’s decision to declassify Ethereum as a security and recognize it as a regulated futures contract on the Chicago Mercantile Exchange, making a strong case for ETF approval.
What’s Driving Expectations: Grayscale Transition and Market Resilience
Expectations for Ethereum’s surge are further fueled by Grayscale’s Ethereum Trust, which is preparing to convert to an ETF. Kendrick sees little reason for the SEC to deviate from the stance CME has taken on Ethereum. Ethereum’s resilience following ETF approval was largely due to the Grayscale Ethereum Trust’s relatively lower market share compared to Bitcoin during the Bitcoin ETF approval. Additionally, low FTX holdings serve to prevent post-approval volatility.
Also Read: Ethereum ETF Approval Process Is Different From Bitcoin ETF
Ethereum ETF Evolution: From Basic to Complex Structure
May 23 could mark the launch of a basic Ethereum ETF, but Kendrick expects more complex ETFs to eventually be introduced. This could potentially involve staking profit rewards and introducing a new dimension to Ethereum market dynamics. Similar to Europe, Kendrick mentions examples such as 21Shares Ethereum Stake ETP (AETH). However, he points out that the higher fees associated with such ETFs often offset the benefits of staking rewards.
Upcoming Ethereum Upgrade and Price Outlook
Kendrick’s analysis also sheds light on Ethereum’s upcoming Dencun or Proto-Danksharding upgrade. This development is expected to increase Ethereum’s competitiveness by reducing layer 2 fees and improving Ethereum’s ecosystem efficiency. Additionally, the potential slowdown in staking speeds is expected to maintain higher staking rewards over the long term. Collectively, these factors are consistent with the expected ETF approval, suggesting a positive outlook for the Ethereum price.
disclaimer: The information provided is for informational purposes only and does not constitute financial advice. Investors should do their research and consider the inherent risks associated with investing in cryptocurrency.