The SEC Expected to Approve Ethereum ETFs by May 23
The Securities and Exchange Commission (SEC) is anticipated to follow a similar strategy to approving spot bitcoin exchange-traded funds (ETFs) when it comes to approving spot Ethereum ETFs. Standard Chartered Bank predicts that the SEC will reject initial applications for Ethereum ETFs but ultimately grant approval on the final deadline of May 23. Geoffrey Kendrick, head of Standard Chartered Bank’s forex and digital assets research, believes that if Ethereum prices perform similarly to Bitcoin’s price leading up to its ETF approval, ETH could reach as high as $4,000 by May 23.
Approval Based on Non-Security Categorization and CME Listing
Kendrick expects the approval of spot Ethereum ETFs primarily because the SEC has not classified ether as a security in its legal actions against crypto companies. Additionally, the fact that ETH is listed as a regulated futures contract on the Chicago Mercantile Exchange adds weight to this expectation. Kendrick does not see any fundamental reason for the SEC to view ETH differently than how the CME already does.
Optimistic Outlook for Crypto and Price Trends
Kendrick generally holds an optimistic outlook on cryptocurrency and price trends. He previously predicted that spot bitcoin ETFs would attract significant inflows of $50-100 billion this year, potentially driving the bitcoin price to $100,000 by year-end and $200,000 by the end of 2025. Kendrick maintains that the $100,000 price prediction for bitcoin still looks achievable and expects steady inflows in spot bitcoin ETFs to gradually raise its price.
Ethereum Less Susceptible to Post-Approval Selling
Kendrick believes that ether is less vulnerable to post-approval selling compared to bitcoin. This is primarily because the Grayscale Ethereum Trust has a smaller share of the total ETH market cap than the Grayscale Bitcoin Trust had before BTC ETF approvals. Kendrick notes that FTX holdings are even lower, further reducing the potential for selling pressure.
Ethereum ETFs with Staking Yields to Come Later
Kendrick expects simple Ethereum ETFs that replicate ether price movements to be approved on May 23. However, ETFs that include staking yield rewards may be introduced at a later date. He mentions that such ETFs already exist in Europe, with AETH being the largest one. Kendrick also comments on Ethereum’s upcoming Dencun or Proto-Danksharding upgrade, stating that it will benefit the ether price by capturing more value within the ETH ecosystem and maintaining higher staking rewards for longer.
Hot Take: The Potential Approval of Ethereum ETFs
There is both optimism and pessimism among crypto experts regarding the approval of spot Ethereum ETFs. However, Standard Chartered Bank’s Geoffrey Kendrick predicts that pending applications for ETH spot ETFs will likely be approved by the SEC on May 23. If this happens, it could have a significant impact on the price of Ethereum, potentially driving it as high as $4,000. With the SEC’s non-security categorization of ether and its listing as a regulated futures contract on CME, there are strong grounds for approving Ethereum ETFs. It remains to be seen whether these predictions will come true.
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