The Securities and Exchange Commission is expected to follow the strategy used to approve an in-kind Bitcoin exchange-traded fund. Ethereum ETH
+2.62%
According to Standard Chartered Bank, the ETF will start with a rejection and ultimately grant approval with an initial final deadline of May 23.
“We expect pending applications for the ETH US spot ETF to be approved on May 23, which is the final deadline for the first ETF under consideration, which is the same as January 10 for the BTC ETF,” Standard Chartered said. said Geoffrey Kendrick, head of foreign exchange at the Bank. and Digital Asset Research wrote in a report Tuesday. “If ETH price performs similarly to what BTC price did ahead of BTC ETF approval, ETH could trade as high as $4,000 by then.”
Kendrick said the SEC has not classified Ethereum as a security in its legal actions against cryptocurrency companies, and that ETH is listed as a regulated futures contract on the Chicago Mercantile Exchange, adding weight to these expectations. Approval is mainly expected. .
“Grayscale has the trust of ETH, which wants to convert to an ETF, so rejecting the application will likely lead to another appeal from Grayscale,” he added. “We see no fundamental reason for the SEC to view ETH differently than CME already does,” he added.
consistently optimistic
Kendrick has an optimistic outlook on cryptocurrencies in general and price trends in particular. He said earlier this month, before the spot Bitcoin ETF was approved, that the fund is expected to attract $50 billion to $100 billion in inflows this year, resulting in the price of Bitcoin reaching $100,000 by the end of the year and $200,000 in 2019. He said it could go up to . Late 2025.
Kendrick said in a report today that the $100,000 price prediction “still looks achievable,” adding that the steady inflow of spot Bitcoin ETFs is expected to push the Bitcoin price upward gradually.
Bitcoin prices fell following the approval of the spot Bitcoin ETF, primarily due to outflows from the Grayscale Bitcoin Trust (GBTC), but have since rebounded and are currently trading at around $43,540.
Kendrick said Ethereum is less sensitive to post-approval sales like Bitcoin. “The main reason for this is that Grayscale Ethereum Trust has a smaller share of the total ETH market cap than the BTC ETF pre-approval GBTC, and within it, FTX holdings are much smaller,” he pointed out.
Ethereum ETF with staking yield to be approved at a later date
Kendrick said he expects only simple Ethereum ETFs that replicate ETH price movements will be approved on May 23, and that ETFs with staking return rewards could be introduced later.
“Both types exist in Europe. AETH (21Shares Ethereum Stake ETP) is the largest ETF that includes staking return rewards. However, since AETH has higher fees than ETH, the staking rewards are offset by fees.” he said
Kendrick also mentioned Ethereum’s upcoming Dencun or Proto-Danksharding upgrade and said it would help the Ethereum price. “Overall, this upgrade will allow us to capture more value within the ETH ecosystem as lower Layer 2 fees make ETH more competitive, and slower staking sustains higher staking rewards for longer, both of which “It is positive for ETH price,” he concluded.
Overall, cryptocurrency experts were both optimistic and pessimistic about the imminent approval of a spot Ether ETF.
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