The Securities and Exchange Commission (SEC) is anticipated to take a comparable approach in approving spot Bitcoin (BTC) exchange-traded funds (ETFs) for spot Ethereum ETFs, with May 23 set as the proposed deadline for approval. Standard Chartered Bank’s analysis reveals that pending applications for spot Ethereum ETFs are likely to be approved on May 23, which is considered to be the equivalent date of January 10 for Bitcoin ETFs. This development is expected to have a significant impact on the price of Ethereum, with projections soaring as high as $4,000 by the specified date.
Standard Chartered Bank’s Geoffrey Kendrick supports the approval of spot Ethereum ETFs based on the SEC’s classification of ether as a non-security in its legal actions against crypto companies. Moreover, Ethereum being listed as a regulated futures contract on the Chicago Mercantile Exchange (CME) adds credibility to the expectation of approval. These factors indicate a growing acceptance and recognition of Ethereum as a legitimate asset in the financial market.
While Scott Johnsson, a financial lawyer, believes that long-term approval for spot Ethereum ETFs is highly likely, he foresees potential short-term delays due to ongoing regulatory actions involving Coinbase/Binance securities exchanges. Johnsson draws attention to the regulatory pathway from a spot digital asset to a spot ETF offering by using Bitcoin as an example. He notes that Bitcoin’s approval process took seven years, involving numerous steps and disapprovals along the way. However, for Ethereum, the timeline is expected to be compressed as applications for both futures ETFs and spot ETFs are open. Johnsson suggests that certain prerequisites that were previously necessary for spot approval may no longer be required, such as Step 3, which entails the SEC issuing a formal 19b-4 approval for the futures ETF.
Johnsson highlights two key factors that are fundamental to understanding the SEC’s current approach to future approvals, including those related to Ethereum. Firstly, he discusses the threshold question in the context of the Grayscale ruling, which primarily focuses on correlation analysis. Secondly, he emphasizes the SEC’s perspective as outlined in the recent BTC approval order, which considers factors such as correlation with the CME, a substantial sample period, intra-day trading data, and consistency throughout the sample period. Although 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 near future, paving the way for spot Ethereum ETF approval. May is being touted as the expected month of approval.
Overall, industry analysts and experts concur that the SEC’s approval of spot Ethereum ETFs is only a matter of time, provided there are no major legal shifts. This impending approval has the potential to significantly impact the price and recognition of Ethereum within the financial market. As Ethereum continues to rally, with its current trading value at $2,370, an increase of over 2% in the past 24 hours and over 7% in the past seven days, market participants are eagerly awaiting the SEC’s decision. While the path to approval may not be without obstacles, it is expected that Ethereum will join Bitcoin in the realm of ETFs in the foreseeable future.
Disclaimer: The views expressed in this article are for educational purposes only and represent the analysis of industry experts. This article does not provide financial advice and should not be considered as a recommendation to buy, sell, or hold any investments. Investing in cryptocurrencies carries inherent risks, and readers are advised to conduct their own research before making any investment decisions. The information provided on this platform is to be used solely at the reader’s own risk.
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