Standard Chartered Bank reportedly has predicted that the U.S. Securities and Exchange Commission (SEC) will approve spot Ethereum exchange-traded funds (ETFs) by May 23, 2024.
Standard Chartered Bank, a British multinational banking and financial services company, has a significant presence in global markets. Founded in 1969 through a merger of two banks, the Standard Bank of British South Africa and the Chartered Bank of India, Australia and China, it boasts a rich history dating back to the mid-19th century. The bank operates a network of more than 1,200 branches and outlets across more than 70 countries and employs around 87,000 people.
Main Highlights of Kendrick’s report
- Approval Timeline: The bank expects the SEC to approve pending applications for U.S. spot Ethereum ETFs on the final deadline, paralleling the timeline for spot Bitcoin ETFs.
- Ethereum’s Price Projection: Kendrick projects that if Ethereum’s price trends mimic those of Bitcoin in the lead-up to its ETF approval, Ethereum could reach as high as $4,000 by the approval date.
- SEC’s Stance on Ethereum: The SEC has not classified ether as a security in its legal actions against crypto companies. The listing of Ethereum as a regulated futures contract on the Chicago Mercantile Exchange (CME) strengthens the likelihood of ETF approval.
- Grayscale’s Ethereum Trust: Grayscale’s intent to convert its Ethereum trust into an ETF is noted. A denial of this application could lead to an appeal by Grayscale, but Kendrick sees no fundamental reason for the SEC to treat Ethereum differently than the CME.
Kendrick’s Optimistic Outlook on Crypto
- Spot Bitcoin ETF Inflows and Price Predictions: Kendrick previously predicted that spot Bitcoin ETFs could attract $50-100 billion in inflows in 2024, potentially driving Bitcoin’s price to $100,000 by year-end and $200,000 by 2025.
- Post-Approval Bitcoin Price Trends: Despite a decline in Bitcoin’s price following the spot ETF approvals, mainly due to outflows from the Grayscale Bitcoin Trust, the price has since recovered, trading at around $43,540.
Ethereum’s Market Dynamics Post-ETF Approval
- Less Susceptibility to Post-Approval Selling: Ethereum is viewed as less vulnerable to post-approval selling compared to Bitcoin, partly because the Grayscale Ethereum Trust holds a smaller proportion of the total ETH market cap compared to the Grayscale Bitcoin Trust’s share before Bitcoin ETF approvals.
Future of Ethereum ETFs
- Types of ETFs: Initially, simple Ethereum ETFs replicating Ether price movements are expected to be approved. ETFs, including staking yield rewards, might follow later.
- Comparison with European ETFs: Kendrick notes that both types of Ethereum ETFs already exist in Europe, with AETH being the largest ETF that includes staking yield rewards.
Ethereum’s Upcoming Upgrade
- Impact of Dencun/Proto-Danksharding Upgrade: Kendrick comments on Ethereum’s upcoming upgrade, predicting it will positively impact Ether prices by capturing more value within the Ethereum ecosystem and maintaining higher staking rewards for a longer period.
What Standard Chartered Said About Ethereum in October 2023
Last October, Standard Chartered Bank projected that Ethereum could experience a fivefold increase in its value, potentially reaching $8,000 by the close of 2026.
At present, Ethereum is primarily utilized for non-fungible tokens (NFTs) and decentralized finance (DeFi). However, Kendrick expects Ethereum’s expanding roles in gaming and tokenization will create substantial new demand.
Per CoinDesk’s article, Kendrick further stated that these emerging applications would serve as real-world examples, illustrating how various sectors can transition to the Ethereum blockchain to leverage its advantages over existing systems. He expects significant progress in these sectors to materialize between 2025 and 2026.
As for the near term, Kendrick predicted a positive market-wide impact from Bitcoin’s upcoming halving event in April 2024. He said this event would buoy the entire crypto market, including Ethereum, and forecasted that Ethereum’s value would reach $4,000 by the end of 2024.
Moreover, Kendrick suggested that the $8,000 valuation is not the final destination for Ethereum. He indicated that this is merely an initial stage leading up to the bank’s long-term valuation estimate for Ethereum, which he places between $26,000 and $35,000.
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