Ryan O’Neill: Standard Chartered Bank Optimistic SEC Will Approve Spot Ethereum ETFs on May 23
The British multinational bank has on Tuesday, January 30 report, expressed optimism that the US Securities and Exchange Commission (SEC) will approve the pending applications for spot Ethereum exchange-traded funds (ETFs).
The Bill Winters-led Standard Chartered Bank revealed in its Tuesday report that the securities watchdog will likely approve the spot Ethereum ETFs. The bank projected the Gary Gensler-chaired SEC to approve the ETFs bid on May 23.
SEC Approving Ethereum ETFs
The London-headquartered bank forecasts that the ETH would mimic the rally realized by Bitcoin in 2023 to test the $4,000 level. The British bank considers that Ethereum will likely replicate the Bitcoin uptrend momentum during the pre-approval period.
Standard Chartered Bank detailed that the SEC will likely replicate the strategy deployed before finally approving the spot Bitcoin ETFs. However, the bank ruled the likelihood of the SEC issuing a series of denials that would lengthen the wait for nearly ten years, as experienced in the spot Bitcoin ETF bids.
Standard Chartered Bank expects the SEC to issue several rejections, resulting in deliberative talks that would usher in the ultimate approval of spot Ethereum ETFs on May 23.
The Standard Chartered Bank’s head of digital assets research, Geoffrey Kendrick, revealed growing anticipations for the SEC to approve the pending applications for spot ETH ETFs. The crypto assets executive projects the approval on the final deadline slated on May 23 for the initial batch of ETFs under consideration that would constitute an equivalent to the January 10 for BTC ETFs.
Kendrick indicates that were the ETH prices to mirror the Bitcoin performance, it was likely that the pre-approval hype of the ETH ETFs would propel ETH to $4,000.
Kendrick perceives the spot Ethereum ETFs approval as a likely outcome primarily propelled on two grounds. He indicates that the SEC has yet to classify Ether as security in the legal actions targeting crypto firms.
Kendrick considers that the Chicago Mercantile Exchange lists ETH as one of the regulated futures contracts. Such classification adds weight towards likely approval.
Grayscale Investments’ existing ETH trust that it desires to convert into the spot Ethereum ETH. Kendrick considers that the move by the SEC to deny Grayscale’s bid would likely prompt an appeal. The court is likely to rule as the case in GBTC in 2023, ruling out no fundamental reasons for the Gensler-led regulator having a divergent view that CME does.
Standard Chartered Bank Consistently Optimistic Forecast
Kendrick conveys an optimistic perspective on crypto performances, particularly in likely uptrend momentum. At the onset of January, the digital assets head projected that the spot Bitcoin ETFs would attract $50-100 billion in inflows in 2024.
Kendrick indicated that the multi-dollar inflow would rally the Bitcoin price to $100,000 by December and perhaps test $200,000 by 2025. The crypto head at Standard Chartered stated the $100K price forecast is achievable.
He added that the spot Bitcoin ETFs will witness steady inflows in the process, fueling a demand-driven price rally.
Kendrick acknowledged that the Bitcoin price declined after the spot Bitcoin ETF approval primarily from the outflows as investors cashed their positions to profit from Grayscale Bitcoin Trust (GBTC).
Kendrick indicates that the outflows have slowed, leading to the bounce back in Bitcoin price to exchange hands around $43,000.
Kendrick indicated that Ether has reduced vulnerability to the post-approval sale observed in Bitcoin. He noted that Grayscale Ethereum Trust accounts for a smaller share of the entire ETH market capitalization, unlike in GBTC before the BTC ETF approval. Also, FTX accounts for even lower holdings whose sales are unlikely to replicate the GBTC outflows.
Subsequent Approval of Ethereum ETFs Featuring Staking Yields
Kendrick anticipates that the SEC will approve the simple Ethereum ETFs that track the ether price movements on May 23. ETFs that feature staking yield rewards would secure approval at a later date.
Kendrick is confident that the US would likely replicate Europe, where spot ETH ETFs that feature staking yield rewards exist. This is evident in 21Shares Ethereum Staking ETP (AETH), the largest ETF featuring staking yield rewards.
Nonetheless, AETH that, features higher fees than ETH have them offsetting the rewards.
Kendrick reflected on Ethereum’s Dencun upgrade as likely to benefit the ether price. The upgrade will onboard more value to the ETH ecosystem with lower Layer 2 fees set to optimize ETH’s competitiveness.
Editorial credit: sdx15 / Shutterstock.com
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