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Standard Chartered Exec: SEC’s Approval Strategy for Spot Ethereum ETFs Is ‘Reject, Delay, and Eventually Accept’

Last Updated January 31, 2024 10:50 AM
Teuta Franjkovic
Last Updated January 31, 2024 10:50 AM

Key Takeaways

  • The SEC is expected to approve spot Ethereum ETFs after initially rejecting them.
  • This approval could potentially drive ETH prices.
  • Standard Chartered exec is bullish on the crypto market and expects BTC to reach $100,000 by the end of the year.

The Securities and Exchange Commission (SEC) is anticipated to replicate its approach taken with spot Bitcoin exchange-traded funds (ETFs) when considering spot Ethereum ETFs, as per insights  from Standard Chartered Bank.

This process is expected to commence with initial rejections, progressively moving towards granting approval.

Key May 23 Deadline for SEC’s Decision on Ethereum ETFs

The pivotal moment for this development is projected to be the initial final deadline set for May 23, marking a significant date in the trajectory of spot Ethereum ETFs within the regulatory landscape.

Geoffrey Kendrick, head of Standard Chartered Bank’s forex and digital assets research, wrote :

“We expect pending applications for ETH U.S. spot ETFs to be approved on May 23, the final deadline for the first of the ETFs under consideration — the equivalent date to Jan. 10 for BTC ETFs. If ETH prices perform similarly to how BTC prices performed in the lead-up to BTC ETF approval, ETH could trade as high as $4,000 by then.”

Ether price
Credit: Bloomberg

Kendrick projects  a favorable outcome for the approval of spot Ethereum ETFs, basing this anticipation on two pivotal factors.

Firstly, the SEC’s historical stance in its legal proceedings against crypto companies has not classified ether as a security, setting a precedent that bodes well for the approval process.

Secondly, the recognition of ETH as a regulated futures contract on the prestigious Chicago Mercantile Exchange lends additional credibility and support to the case for spot Ethereum ETFs, reinforcing the expectation for their eventual approval.

Kendrick added :

“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. We see no fundamental reason for the SEC to view ETH differently than the CME already does.”

Bullish Crypto Forecast Amid Market Fluctuations

Kendrick continues to exude confidence in the crypto market’s potential, particularly highlighting promising price trajectories. Preceding the approval of spot Bitcoin ETFs earlier this month, he anticipated  these funds to magnetize an influx ranging from $50 to $100 billion within the year.

This capital injection, he predicted, could propel Bitcoin’s value to an impressive $100,000 by the year’s end, potentially soaring to $200,000 by the close of 2025.

Despite the transient dip in Bitcoin’s value following the initial nod to spot Bitcoin ETFs, attributed mainly to withdrawals from the Grayscale Bitcoin Trust (GBTC), Kendrick’s $100,000 price target  remains firmly within sight. In his latest report, he underscores the belief that a consistent inflow into spot Bitcoin ETFs will methodically bolster Bitcoin’s price. The cryptocurrency’s resilience is evident, as it has recuperated from its post-approval decline and is presently trading at approximately $43,540 , showcasing the dynamic nature of the crypto market.

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