Standard Chartered Bank predicts that Ether (ETH), the world’s second-largest cryptocurrency, could see a significant price increase, potentially hitting $4,000 by May. This surge is expected due to the anticipated approval of spot-based exchange-traded funds (ETFs) in the U.S.
The bank, led by research head Geoff Kendrick, anticipates that the U.S. Securities and Exchange Commission (SEC) will approve Ether ETF applications on May 23, following a pattern similar to its handling of Bitcoin ETFs. Applications by asset managers VanEck and Ark/21Shares are due for a final decision on this date.
The report suggests that the market underestimates the chances of Ether ETF approval. The bank sees no substantial reason why the SEC would treat Ether differently from Bitcoin, especially considering that Ether futures are listed on the Chicago Mercantile Exchange (CME). Additionally, the SEC did not classify Ether as a security in its legal case against Ripple.
The analysts expect Ether’s prices to match or outperform Bitcoin during the period leading up to the expected approval date of May 23. They recall Bitcoin’s significant price increase from $25,000 to about $47,000 when spot ETFs were approved.
After the potential ETF approval, Ether is expected to face less selling pressure than Bitcoin. This is partly because the Grayscale Ethereum Fund (ETHE) holds a smaller portion of the Ether market than the Grayscale Bitcoin Fund (GBTC) does of the Bitcoin market. Moreover, fewer shares are held by the FTX bankruptcy estate.
The first type of Ether ETFs in the U.S. is likely to track the spot price of Ether and not include staking rewards, as per the report. This could influence the cryptocurrency’s market dynamics following the ETF approval.
