In a recent report, Standard Chartered Bank anticipates that the Securities and Exchange Commission (SEC) will likely greenlight spot Ethereum exchange-traded funds (ETFs) following a similar trajectory to Bitcoin ETFs. The bank’s projections suggest a potential approval on May 23, which could significantly impact Ethereum’s market dynamics.
Ethereum ETF Approval Anticipated
Geoffrey Kendrick, head of Standard Chartered Bank’s forex and digital assets research, forecasts the approval of spot Ethereum ETFs by May 23, drawing parallels to the approval process for Bitcoin ETFs. Kendrick highlights the SEC’s stance on Ethereum not being classified as a security, coupled with its listing as a regulated futures contract on the Chicago Mercantile Exchange, as key factors supporting this expectation.
Kendrick maintains an optimistic outlook on Ethereum‘s price trajectory, with a potential surge to $4,000 by the anticipated approval date. He emphasizes that the SEC’s treatment of Ethereum aligns with existing market standards, suggesting a favorable regulatory environment for Ethereum-based financial products.
Differentiating Factors from Bitcoin
Comparing Ethereum’s market dynamics to Bitcoin, Kendrick notes Ethereum’s resilience to post-approval selling, attributing it to the relatively smaller share of the total market cap held by Ethereum investment trusts. He suggests that Ethereum ETFs may experience less volatility post-approval compared to Bitcoin counterparts.
While Kendrick expects simple Ethereum ETFs to gain approval initially, he anticipates ETFs incorporating staking yield rewards to be introduced at a later stage. He points to European precedents where such ETFs exist, albeit with higher fees offsetting staking rewards.
Ethereum’s Technological Upgrades
Kendrick also touches upon Ethereum’s upcoming technological upgrades, particularly the Dencun or Proto-Danksharding upgrade. He suggests that these enhancements could bolster Ethereum’s ecosystem by reducing transaction fees and maintaining attractive staking rewards, ultimately supporting Ethereum’s price trajectory.
While Kendrick remains optimistic about Ethereum ETF approvals, sentiments among crypto experts vary. Some express confidence in the imminent approval, while others remain cautious amidst regulatory uncertainties.
In summary, Standard Chartered Bank’s analysis points towards a favorable regulatory outlook for Ethereum ETFs, potentially reshaping the cryptocurrency landscape by offering investors accessible exposure to Ethereum’s market performance.