Amid rumors and expectations, British cross-border bank Standard Chartered expects its Ethereum spot ETF to receive approval from the US Securities and Exchange Commission (SEC) this week.
According to the bank, the approval of these spot ETFs could spur significant market inflows, with estimates ranging from $15 billion to $45 billion in the first year alone.
Additionally, these expected capital inflows are expected to significantly improve Ethereum’s market dynamics, potentially pushing the price towards the $8,000 level by the end of 2024.
Ethereum ETF approval means:
In particular, Standard Chartered’s bullish outlook is supported by the imminent deadlines for the first round of Ethereum ETFs, with VanEck’s closing date being May 23rd and Ark Invest/21Shares’ closing date being May 24th.
Geoff Kendrick, head of FX research and digital asset research at Standard Chartered Bank, expressed high confidence in the approval of these ETFs, estimating the probability at “80% to 90%”. Kendrick specifically noted:
Following approval, we estimate that the spot ETF will attract inflows of between 2.39 and 9.15 million ETH in the first 12 months following approval. Converted to US dollars, this is equivalent to approximately $15 billion to $45 billion. As a percentage of market cap, it is similar to our estimates of Bitcoin ETF inflows, which have proven to be accurate.
Kendrick said that if the spot ETH ETF receives approval as expected, Ethereum could maintain its current price ratio with Bitcoin and is expected to reach $150,000 by the end of 2024. This puts the value of Ethereum at $8,000 by the end of the year.
Moreover, with Standard Chartered predicting Bitcoin will reach $200,000 by the end of 2025, Ethereum could also see its price rise to $14,000 over the same period, reaffirming the bank’s initial price target in March.
Strong market sentiment due to rising ETF approval probability
As the possibility of an Ethereum ETF being approved increases, the price of Ethereum surges, surpassing the $3,600 level for the first time since April 19.
This is an increase of more than 20% in the last 24 hours, pushing Ethereum’s market capitalization past $450 billion.
Market reaction to these developments has been overwhelmingly positive. Derivatives markets such as Deribit have placed heavy bets on the Ethereum currency exceeding the $4,000 price. The most preferred strike price for these options traders is an ambitious $5,000, indicating strong bullish sentiment.
In particular, Bloomberg analysts have increased their optimism about the approval of a spot ETH ETF due to the unexpected increase. Approval probability is 75%This is a significant increase from the previous estimate of 25%.
This reassessment follows reports that the SEC is rapidly changing its position and is urging exchanges to quickly update their 19b-4 filings.
update: @JSeyff And I am increasing the probability of spot Ether ETF approval to 75% (up from 25%). I heard this afternoon that the SEC may do a 180 on this (an increasingly political issue). It will be rejected.) Take a look… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
According to Eric Balchunas, approval could come this Wednesday, signaling a major change in the regulatory environment and potentially setting the stage for further rises in the price of ETH.
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