Ether, the second-biggest cryptocurrency, might experience a significant hike and reach $4,000 by May, according to a report from Standard Chartered Bank. The report suggests that the surge is likely to be driven by the anticipated approval of spot-based ETFs in the US. The bank’s team of analysts, directed by Geoff Kendrick, draws parallels with the approval process for Bitcoin ETFs, foreseeing the US Securities and Exchange Commission delaying decisions until the final deadline on May 23.
May 23- The Potential Approval Date
The bank sets May 23 as an interim date for potential spot ETH ETF approvals, which is in line with the final time limit for application by asset managers Ark/21Shares and VanEck. The market, according to the report, currently is underestimating the probability of approval, which has created an opportunity for significant price movement as the date approaches.
Why the SEC Might Say Yes
Standard Chartered argues that there is no major reason for the SEC to treat Ethereum in a different way than Bitcoin. Drawing on the fact that ETH futures are now listed on the regulated CME (Chicago Mercantile Exchange), the report points out that the SEC did not categorize ETH among the cryptocurrencies considered securities in its legal battle against Ripple.
The Potential Price Boom
If history repeats itself, Ethereum prices could experience a similar surge to Bitcoin’s 85% climb in the lead-up to its ETF approval. The report anticipates that ETH prices will track or possibly outdo Bitcoin during the comparable period leading up to the expected approval date.
Drawing parallels with Bitcoin’s journey, which surged 85% from mid-June to January 10 after BlackRock filed for an ETF, Standard Chartered expects a similar trajectory for Ethereum if ETFs are approved. This optimistic outlook from Standard Chartered suggests ETH could hit $4,000 by late May, compared to its current price of around $2,370.
The bank believes Ethereum might be facing not as much of selling pressure after ETF approval than Bitcoin. This is because the ETHE (Grayscale Ethereum Fund) holds a smaller share of the Ethereum market compared to the Grayscale Bitcoin Fund (GBTC) for Bitcoin. Additionally, concerns about large sell-offs from the FTX bankruptcy estate would not be applicable to Ethereum, which may lead to a further boost in its stability.
In this regard, the report points to Bitcoin’s recent tumble to $38,500 from a high of $49,000 on 11th January, when BTC ETF started trading. Market observers attribute this decline to GBTC fire sales that caused around $5 billion worth of outflows since it was converted into an ETF.
Not everyone shares Standard Chartered’s optimism. The market remains divided on the likelihood of Ethereum ETF approval, with some voices expressing skepticism. Nevertheless, the bank’s analysis offers a compelling argument for why May 23 could be a key date for Ethereum and the broader cryptocurrency ecosystem.
As May 23 approaches, all eyes are on the SEC’s decision regarding spot Ethereum ETFs. Standard Chartered Bank’s optimistic predictions, drawing parallels with Bitcoin’s historical journey, indicate a possible surge for Ether. Whether Ethereum can break the $4,000 barrier will largely depend on regulatory approval and market sentiment in the coming months, making this a critical period for the cryptocurrency’s future.
Celine Brooks is a renowned journalist and author specializing in cryptocurrency and blockchain technology. She holds a Master’s degree in Economics from Harvard University and is very passionate about Crypto. Celine regularly hosts webinars and workshops, sharing her insights and forecasts about the evolving digital currency landscape. She is also an active contributor to several leading financial and tech publications, where she breaks down complex crypto trends into understandable insights for everyday investors.