The Securities and Exchange Commission (SEC) is expected to adopt a similar approach to approving spot Bitcoin (BTC) exchange-traded funds (ETFs) for spot Ethereum ETFs, according to analysis conducted by Standard Chartered Bank. Geoffrey Kendrick, the head of forex and digital asset research at Standard Chartered Bank, predicts that pending applications for spot Ethereum ETFs will be approved on May 23. This date is seen as equivalent to January 10, which was the landmark date for Bitcoin ETFs. Kendrick’s analysis goes even further, suggesting that if Ethereum prices follow a similar trajectory to Bitcoin’s leading up to ETF approval, Ethereum could potentially reach $4,000 by the specified date.
Kendrick also supports the approval of spot Ethereum ETFs based on the SEC’s classification of ether as a non-security in its legal actions against cryptocurrency companies. Furthermore, the fact that Ethereum is listed as a regulated futures contract on the Chicago Mercantile Exchange (CME) adds credibility to the expectation of approval.
Scott Johnsson, a financial lawyer, highlights the potential roadmap for Ethereum ETFs and predicts long-term approval. However, he also warns of possible short-term delays due to ongoing regulatory actions involving Coinbase/Binance securities exchanges. Johnsson draws parallels with Bitcoin’s journey towards ETF approval, which took seven years and involved multiple steps and disapprovals along the way. Nevertheless, he acknowledges that the timeline for Ethereum seems to be compressing, with applications open for both futures ETFs and spot ETFs. Johnsson also suggests that certain prerequisites, such as the SEC issuing formal 19b-4 approval for futures ETFs, may no longer be necessary for spot approval.
Johnsson points out two key factors to understand the SEC’s current approach to future approvals, including Ethereum. Firstly, he discusses the threshold question in relation to the Grayscale ruling, which focused on correlation analysis. Secondly, he emphasizes the SEC’s view, as outlined in the recent BTC approval order, which takes into account correlation with the CME, a lengthy sample period, intra-day trading data, and consistency throughout the sample period. While the specific threshold for sufficiency remains unknown, Johnsson suggests that Ethereum is expected to meet this threshold in the foreseeable future.
Once the required level of correlation is achieved, Johnsson believes that approval for spot Ethereum ETFs is likely to follow shortly after, with the expected month of approval being May. Overall, industry analysts and experts concur that the SEC’s approval of spot Ethereum ETFs is simply a matter of time, barring any major legal shifts. At present, ETH is trading at $2,370, exhibiting a 2% increase in the past 24 hours and a 7% increase in the past seven days, following Bitcoin’s lead.
As the SEC makes strides in approving spot Bitcoin ETFs, it is expected that spot Ethereum ETFs will soon follow suit. Market analysis and regulatory insights suggest that the approval of spot Ethereum ETFs may occur as early as May 23. Factors such as the SEC’s classification of ether as a non-security and Ethereum’s listing as a regulated futures contract on the CME add weight to the expectation of approval. Despite potential short-term delays due to ongoing regulatory actions, the compressed timeline for Ethereum, as compared to Bitcoin’s journey, signals a more expeditious process. The SEC’s current approach, focused on correlation analysis and consistency, indicates that Ethereum could likely meet the required threshold in the near future. Overall, industry analysts and experts remain optimistic about the SEC’s approval of spot Ethereum ETFs, positioning them as a potential investment opportunity.
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