The Securities and Exchange Commission (SEC) is anticipated to take a similar approach in approving spot Bitcoin (BTC) exchange-traded funds (ETFs) when it comes to spot Ethereum ETFs. Standard Chartered Bank analysis suggests that these ETFs will likely receive approval on the initial final deadline of May 23. According to Geoffrey Kendrick, head of forex and digital asset research at Standard Chartered Bank, pending applications for spot Ethereum ETFs are expected to be approved on May 23, a date equivalent to January 10 for Bitcoin ETFs.
Standard Chartered Bank’s Kendrick further predicts that if Ethereum’s price follows a similar pattern to that of Bitcoin leading up to ETF approval, Ethereum could potentially trade as high as $4,000 by the specified date. The basis for Kendrick’s support of spot Ethereum ETF approval lies in the SEC’s classification of ether as a non-security in its legal actions against cryptocurrency companies. Moreover, Ethereum’s listing as a regulated futures contract on the Chicago Mercantile Exchange (CME) adds additional credibility to the expectation of approval.
While spot Ethereum ETF approval in the long term is highly probable, there may be short-term delays due to ongoing regulatory actions involving Coinbase and Binance securities exchanges, according to financial lawyer Scott Johnsson. He analyzes the regulatory path from a plain spot digital asset to a spot ETF offering, using Bitcoin as an example. Johnsson acknowledges that the process for Bitcoin took seven years and encountered various steps and disapprovals along the way. However, he notes that the timeline for Ethereum is shorter, with applications currently open for both futures ETFs and spot ETFs.
Johnsson highlights two key factors to understand the SEC’s current approach to future approvals, specifically related to Ethereum. Firstly, he discusses the threshold question in the context of the Grayscale ruling, which focused on correlation analysis. Secondly, Johnsson emphasizes the SEC’s view as bounded by the recent BTC approval order, which considers 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, the correlation analysis for Bitcoin falls within an acceptable range. Therefore, it is expected that Ethereum will likely meet this threshold in the foreseeable future. Once the required level of correlation is achieved, Johnsson believes that approval for spot Ethereum ETFs will follow shortly after, with May being the anticipated month of approval.
Overall, industry analysts and experts predict that the SEC’s approval of spot Ethereum ETFs is merely a matter of time, unless there are major legal shifts in the cryptocurrency landscape. It is essential to note that investing carries risks, and the opinions expressed in this article are for educational purposes only. Readers are advised to conduct their own research and exercise caution when making investment decisions.
ETH is currently trading at $2,370, experiencing a gain of more than 2% in the past 24 hours and over 7% in the past seven days, closely following Bitcoin’s lead. As the anticipation for spot Ethereum ETFs builds, the cryptocurrency market eagerly awaits the SEC’s decision.
[Featured image from Shutterstock; chart from TradingView.com]
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell, or hold any investments, and investing naturally carries risks. Readers are advised to conduct their research before making any investment decisions. The information provided on this website is used entirely at your own risk.
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