A glimmer of hope shines on the horizon for Ethereum enthusiasts as Standard Chartered Bank anticipates the Securities and Exchange Commission (SEC) to greenlight spot Ethereum exchange-traded funds (ETFs) on May 23rd. This date aligns with the initial deadline for the first batch of Ethereum ETF applications, mirroring the timeline for Bitcoin ETF approvals earlier this year.

Geoffrey Kendrick, head of Standard Chartered Bank’s forex and digital assets research, paints a potentially lucrative picture for Ethereum in his recent report. Should Ethereum price movements follow Bitcoin’s pre-approval surge, Kendrick predicts a hefty jump, with ETH potentially reaching $4,000 by May 23rd.

Several factors bolster Kendrick’s optimistic outlook:

  • SEC and Ethereum: A Nuanced Relationship: Unlike Bitcoin, the SEC hasn’t explicitly categorized Ethereum as a security during its legal battles with crypto companies. This, coupled with Ethereum’s listing as a regulated futures contract on the Chicago Mercantile Exchange, strengthens the case for ETF approval.
  • Grayscale Trust and Potential Appeals: Grayscale, a prominent digital asset manager, holds an Ethereum trust yearning to transform into an ETF. Kendrick believes a denial would likely trigger another appeal, further solidifying the pressure on the SEC to consider Ethereum favorably.
  • CME Precedent Paves the Way: Kendrick emphasizes that “we see no fundamental reason for the SEC to view ETH differently than the CME already does.” The CME’s existing regulated Ethereum futures contract signifies confidence in Ethereum’s legitimacy, potentially influencing the SEC’s stance.

Kendrick’s optimism extends beyond Ethereum’s immediate future. He remains bullish on the overall crypto market, reiterating his earlier prediction that Bitcoin ETFs could attract $50–100 billion in inflows this year, propelling the price to $100,000 by December and potentially doubling to $200,000 by the end of 2025.

However, Kendrick acknowledges the possibility of Ethereum experiencing less post-approval turbulence compared to Bitcoin. He reasons that the Grayscale Ethereum Trust holds a smaller percentage of the total Ethereum market cap compared to GBTC’s pre-approval dominance, minimizing potential selling pressure. Additionally, FTX, a major holder within the trust, reportedly maintains a lower profile, further mitigating selling risks.

While May 23rd stands as the potential launch date for basic Ethereum ETFs mirroring price movements, Kendrick expects ETFs incorporating staking yield rewards to emerge later. He cites the success of AETH, a European ETF offering staking yields, while highlighting its higher fees that potentially negate the rewards.

Furthermore, Kendrick views Ethereum’s upcoming Dencun or Proto-Danksharding upgrade positively. He predicts it will capture more value within the Ethereum ecosystem by enhancing Layer 2 fee efficiency and potentially extending staking rewards. Both factors, Kendrick concludes, bode well for Ethereum’s price trajectory.

The cryptocurrency community remains split on the certainty of a May 23rd Ethereum ETF approval, with optimists like Kendrick balancing the cautious stance of others. Nevertheless, the prospect of an Ethereum ETF launch injects a dose of excitement into the market, potentially paving the way for another significant chapter in the digital asset saga.

By Alex Wheeler

Alex is a lead writer at AltcoinsAnalysis, bringing the audience all leading developments in the blockchain industry and the latest trends in the cryptocurrency market.