us securities And Standard Chartered predicts that the Exchange Commission is likely to allow exchange-traded funds to hold the cryptocurrency Ethereum in May.
The bank said in a research report Tuesday that the last day the agency has to consider ETF applications from VanEck and Arc21Shares is May 23. Asset managers will be the first to face a deadline.
Standard Chartered expects the SEC to rule on the application on the last day, as it did when it approved 10 Bitcoin ETFs on January 10. According to Jeff Kendrick, head of West FX Research and Digital Asset Research at Standard Chartered, Ethereum has important similarities to Bitcoin's legal and financial situation and will follow a similar approval pattern. It is said to suggest that
Last June, the SEC removed Bitcoin and Ether from its list of 67 tokens that are considered securities. Additionally, like Bitcoin, Ether is traded in futures on the Chicago Mercantile Exchange, which is an important monitoring tool. Ether is the second-largest cryptocurrency by market value after Bitcoin, at approximately USD 285 billion.
Kendrick expects Ether's price to rise to $4,000 by the expected May 23 approval date, assuming it follows a similar trading pattern to Bitcoin through the ETF's approval process. Ether traded at around $2,370 on Tuesday.
However, this price prediction is based on the fact that several assumptions are correct, including that general market sentiment for approval remains low, that implied volatility is incorrect, and that the SEC approved multiple filings on the same day. Based on.
less vulnerable
According to Standard Chartered, Ether is expected to avoid much of the decline experienced by Bitcoin after the ETF approval. After the ETF approval, Bitcoin fell by as much as 20% as investors including FTX sold billions of dollars of their holdings in the Grayscale Bitcoin Trust (GBTC). This fund is converted from a trust that is not redeemable by its holders. Grayscale's existing Ethereum Trust holds a smaller portion of Ether's market capitalization compared to Bitcoin held in GBTC.
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“These factors should make ETH more vulnerable than BTC to a post-confirmation crash,” Kendrick wrote. — Elijah Nicholson-Mesmer, Isabel Lee and (c) 2024 Bloomberg LP