Standard Chartered Predicts Ether Surge to $4,000 by May on Potential Spot ETF Approval in the U.S.

Standard Chartered Bank suggests that Ether (ETH), the second-largest cryptocurrency, may experience a substantial increase, reaching $4,000 by May, driven by the potential approval of spot-based exchange-traded funds (ETFs) in the U.S. The British bank foresees the U.S. Securities and Exchange Commission (SEC) treating spot ether ETF applications similarly to those of Bitcoin and expects approvals around May 23, coinciding with the final deadlines for VanEck and Ark/21Shares applications.

The report, led by Geoff Kendrick and his research team at StanChart, emphasizes the belief that the SEC will follow a pattern observed with Bitcoin, initially delaying decisions on spot ETF applications and eventually granting approval on the final deadline. Despite the market’s current underestimation of approval odds, the bank argues that there is “no fundamental reason” for the SEC to treat ETH differently than Bitcoin. Notably, the report highlights that ETH futures are already listed on the regulated Chicago Mercantile Exchange (CME), and the SEC did not classify ETH among the 67 cryptocurrencies deemed securities in its legal battle against Ripple.

Anticipating the potential approval on May 23, the bank predicts that ETH prices will either track or outperform Bitcoin (BTC) during a comparable period. The report draws parallels to BTC’s 85% surge from around $25,000 to approximately $47,000 when spot ETFs received approval on January 10 after BlackRock filed for an ETF in mid-June.

Furthermore, the report suggests that ETH may face less selling pressure post-approval compared to BTC. This is attributed to the Grayscale Ethereum Fund (ETHE) having a smaller market share of ether market capitalization than the Grayscale Bitcoin Fund (GBTC), with fewer shares held by the FTX bankruptcy estate. The contrast is drawn with Bitcoin’s recent decline to $38,500 from a $49,000 high on January 11, linked to GBTC fire-sales and significant outflows amounting to $5 billion since its conversion into an ETF.