Ethereum Could Hit $4,000 as Standard Chartered Foresees Spot ETH ETF Approval by May

Ethereum is set to pump as it mirrors Bitcoin’s price action in the run up to the approval of its own spot ETFs—that’s the message contained in a report Standard Chartered Bank sent to its clients on Tuesday. 

The bank suggested the price of ETH could hit US$4000 before the launch of Ethereum spot ETFs, which it expects will be approved on May 23 when the final deadline for a decision rolls around.

History Doesn’t Repeat, But It Often Rhymes

In the report, Standard Chartered’s Head of Forex and Digital Assets Research, Geoffrey Kendrick, wrote in a section titled “History doesn’t repeat itself, but it often rhymes” that he expects the SEC’s approval process for Ethereum spot ETFs to be similar to that used for Bitcoin ETFs:

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

Geoffrey Kendrick, Head of Standard Chartered Bank’s Forex and Digital Assets Research

Kendrick also speculated that if Ethereum’s price action mirrors that of Bitcoin in the lead up to the approval of BTC spot ETFs, ETH could hit the US$4000 mark:

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.

Geoffrey Kendrick, Head of Standard Chartered Bank’s Forex and Digital Assets Research

At the time of writing Ethereum was changing hands at US$2337, as per CoinGecko.

Standard Chartered has a history of bullishness around crypto, predicting in 2023 that Bitcoin could reach US$120,000 by the end of 2024 and ETH could reach US$4,000. The bank also puts ETH’s long term ‘structural’ valuation at a whopping US$26,000 – $35,000.

There’s also the potential for the price of ETH to plummet after the launch of spot ETFs, as we saw with Bitcoin. However Kendrick thinks this is less of an issue for ETH as Grayscale Ethereum Trust holds much less of the overall supply of ETH than was held in its Bitcoin trust product—which was the source of much of the sell pressure following the launch of the spot ETFs.

First Wave Of ETFs Expected To Exclude Staking Rewards

Kendrick said he expects the first round of Ethereum spot ETFs approvals will only follow the spot price of ETH. That is, they will not include staking rewards — although he expects these to come later, noting these products are already available in Europe:

Both types exist in Europe; AETH [21Shares Ethereum Staking ETP] is the largest ETF that includes staking yield rewards. However, given that AETH has higher fees than ETH, staking rewards are offset by fees.

Geoffrey Kendrick, Head of Standard Chartered Bank’s Forex and Digital Assets Research

Market Not Confident Approval Imminent

Standard Chartered’s confidence in the imminent approval of Ethereum spot ETFs is not shared by the market more broadly — in the report Kendrick notes that “based on market commentary, we believe approval expectations are relatively low, likely below 50%.”

In fact, recent communications from some other financial institutions have predicted no approval this year at all. A note to clients from investment bank TD Cowen released Monday put the estimated approval timeframe somewhere in 2025 or 2026. Jaret Seiberg, the leader of the bank’s Washington Research Group, cited political issues as the cause of the delay:

We do not expect the SEC in 2024 to approve a spot Ethereum ETF…This is a political call. We believe there is no upside for SEC Chair Gary Gensler to approve a spot Ethereum ETF given how upset progressive Democrats were over the agency’s approval of a spot bitcoin ETF earlier this month.

Jaret Seiberg, TD Cowen, Washington Research Group Lead