The Securities and Exchange Commission (SEC) is expected to adopt a similar approach in approving spot bitcoin exchange-traded funds (ETFs) for spot Ethereum ETFs, with initial rejections likely followed by approval by the initial final deadline on May 23, as forecasted by Standard Chartered Bank.
Geoffrey Kendrick, head of forex and digital assets research at Standard Chartered Bank, predicts in a report that pending applications for ETH U.S. spot ETFs will likely gain approval by May 23. He draws parallels to the approval process of BTC ETFs, suggesting that if Ethereum prices follow a similar trajectory, they could potentially reach $4,000 by the deadline.
Kendrick bases his projection of spot Ethereum ETF approvals primarily on the SEC’s non-classification of ether as a security in its legal actions against cryptocurrency firms. Additionally, the fact that ETH is listed as a regulated futures contract on the Chicago Mercantile Exchange supports this expectation.
“Grayscale also has an ETH trust that it wants to turn into an ETF, so a denial of that application would likely lead to another appeal by Grayscale,” he said, adding that “we see no fundamental reason for the SEC to view ETH differently than the CME already does.”
Kendrick’s overall stance on cryptocurrencies is optimistic, particularly concerning price trends. He previously predicted substantial inflows into spot bitcoin ETFs, leading to a rise in the bitcoin price. Despite initial declines in the bitcoin price following ETF approvals, Kendrick remains optimistic about its potential, suggesting that steady inflows into spot bitcoin ETFs will gradually drive up prices.
Unlike bitcoin, Kendrick suggests that ether is less prone to post-approval selling, citing differences in market cap share between Grayscale Ethereum Trust and Grayscale Bitcoin Trust.
He anticipates that on May 23, simple Ethereum ETFs that mirror ether price movements will be approved, while ETFs incorporating staking yield rewards may be introduced later. Kendrick notes the existence of such ETFs in Europe but highlights potential challenges, such as higher fees offsetting staking rewards.
Kendrick also comments on Ethereum’s upcoming upgrades, suggesting they will positively impact ether prices by increasing value within the ETH ecosystem and maintaining staking rewards.
In summary, opinions among crypto experts vary regarding the likelihood of spot ether ETF approval, but Kendrick’s outlook remains generally positive.