As Standard Chartered Awaits SEC Decision on May 23
Standard Chartered Bank is painting a bullish picture for Ethereum, with expectations of a substantial surge in its value if the SEC gives the green light to U.S. spot Ethereum ETFs on May 23. Geoffrey Kendrick, Head of Forex and Digital Assets Research at the bank, has positioned this date as a pivotal moment for Ethereum, drawing parallels with the historical timeline of Bitcoin ETF approvals.
SEC’s Stance Unfolds: Echoes of Bitcoin’s ETF Journey
The SEC’s strategy in approaching Ethereum ETFs mirrors the trajectory observed with Bitcoin ETFs, starting with initial rejections and culminating in final approvals. Drawing a comparison to the significant milestone of January 10 for Bitcoin, Kendrick suggests that Ethereum’s price could potentially soar to $4,000, aligning with the pattern witnessed in the pre-ETF approval phase of Bitcoin.
Kendrick’s optimism stems from the SEC’s non-labeling of Ethereum as a security and its recognition as a regulated futures contract on the Chicago Mercantile Exchange, providing a strong case for ETF approval.
Factors Driving Anticipation: Grayscale’s Transition and Market Resilience
The anticipation for Ethereum’s surge is further fueled by Grayscale’s Ethereum trust, poised to transition into an ETF. Kendrick sees little reason for the SEC to deviate from the stance taken on Ethereum by the CME. Ethereum’s resilience post-ETF approval is attributed to the relatively smaller market share of the Grayscale Ethereum Trust compared to its Bitcoin counterpart during Bitcoin ETF approvals. Additionally, lower FTX holdings provide insulation against post-approval volatility.
Also Read: Ethereum ETF Approval Process Set to Differ from Bitcoin ETF
Evolution of Ethereum ETFs: From Basic to Complex Structures
While May 23 might usher in basic Ethereum ETFs, Kendrick anticipates the eventual introduction of more complex ETFs. These could potentially include staking yield rewards and introducing a new dimension to Ethereum’s market dynamics. Drawing parallels with Europe, Kendrick mentions examples like the 21Shares Ethereum Staking ETP (AETH). However, he notes that higher associated fees with such ETFs often offset the benefits of staking rewards.
Upcoming Ethereum Upgrades and Price Outlook
Kendrick’s analysis also sheds light on Ethereum’s upcoming Dencun or Proto-Danksharding upgrade. This development is expected to enhance Ethereum’s ecosystem efficiency by reducing Layer 2 fees, making Ethereum more competitive. Additionally, a potential deceleration in staking pace is foreseen to sustain higher staking rewards over an extended period. Collectively, these factors paint a positive outlook for Ethereum’s price, aligning with the anticipated ETF approvals.
Disclaimer: The information provided is for informational purposes only and does not constitute financial advice. Investors are urged to conduct their research and consider the inherent risks associated with cryptocurrency investments.