The cryptocurrency market is abuzz with anticipation as Standard Chartered Bank predicts a significant boost in the price of Ethereum (ETH) in the coming months. According to the bank’s report released on Tuesday, ETH, the second-largest cryptocurrency by market value, could surge by nearly 70%, reaching a price of $4,000 by May. This optimistic outlook is based on the expectation that applications for spot-based Ethereum ETFs (exchange-traded funds) for Ethereum will receive regulatory approval in the United States.
Ethereum ETFs on the Horizon
Standard Chartered’s research team, led by Geoff Kendrick, has a compelling rationale for their forecast. They believe that the U.S. Securities and Exchange Commission (SEC) will follow a strategy similar to what was observed with Bitcoin. Just as the SEC initially rejected Bitcoin ETF applications before eventually granting approval, they anticipate a similar trajectory for spot Ethereum ETFs. This pattern is expected to culminate in regulatory approval on the final deadline of May 23, coinciding with the deadlines for applications submitted by asset management firms VanEck and Ark/21Shares.
Geoffrey Kendrick, the head of Standard Chartered Bank’s forex and digital assets research, explained, “We expect pending applications for ETH U.S. spot ETFs to be approved on May 23, the final deadline for the first of the ETFs under consideration — the equivalent date to Jan. 10 for BTC ETFs.” He further added, “If ETH prices perform similarly to how BTC prices performed in the lead-up to BTC ETF approval, ETH could trade as high as $4,000 by then.”
This positive outlook for Ethereum ETFs is based on the SEC’s historical stance. The SEC has not categorized Ether as a security in its legal actions against crypto companies, and the fact that ETH is listed as a regulated futures contract on the Chicago Mercantile Exchange adds weight to the expectation of ETF approval. Kendrick emphasized, “Grayscale also has an ETH trust that it wants to turn into an ETF, so a denial of that application would likely lead to another appeal by Grayscale.” He concluded that there is no fundamental reason for the SEC to view Ethereum differently than the CME already does.
A Bullish Perspective
Geoff Kendrick’s optimism extends beyond Ethereum to the broader cryptocurrency market. Earlier this month, he predicted that spot Bitcoin ETFs would attract inflows of $50-100 billion this year, potentially driving the Bitcoin price to $100,000 by the end of 2024 and $200,000 by the end of 2025.
While the $100,000 price prediction for Bitcoin remains within reach, Kendrick suggests that consistent inflows into spot Bitcoin ETFs will gradually lift the Bitcoin price. However, recent market dynamics have showcased Bitcoin’s nuanced behavior.
On January 29, 2024, Bitcoin’s value fluctuated within a relatively narrow range, hovering between approximately $41,950 and $42,069 in the last hour of trading. Various indicators, including oscillators and moving averages, provide mixed signals, reflecting the complex interplay of market factors. As the price briefly dipped below the $42,000 threshold, it appears that bearish forces temporarily gained the upper hand.
Over the past 24 hours, Bitcoin experienced a moderately volatile market, with a trading range from $41,735 to $42,479 per unit. Despite this, trading volume remained relatively low at $12.43 billion, while its market capitalization stood at $828 billion.
Analyzing Bitcoin’s moving averages reveals a cautiously optimistic trend, particularly in shorter durations (10, 20, 30 days), but the 30-day and 50-day simple moving averages present a bearish signal, urging caution for long-term traders.
In conclusion, the cryptocurrency market remains dynamic and unpredictable, with Ethereum ETFs potentially reshaping the landscape in the coming months. While Standard Chartered Bank’s forecast points to a bullish future for Ethereum, the intricacies of the market demand vigilance and careful analysis. As investors and enthusiasts watch these developments unfold, the crypto world continues to offer both challenges and opportunities in equal measure.
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