The United States Securities and Exchange Commission (SEC) has thrown a curveball at the cryptocurrency industry, requesting refinements to applications from major exchanges—Nasdaq, CBOE, and NYSE—to list spot ether exchange-traded funds (ETFs). This surprising move suggests a potential green light from the regulatory authority, according to sources familiar with the process.
Traditionally, SEC requests for modifications precede approvals, indicating a possible shift in the agency’s stance towards crypto ETFs. If granted, this approval could mark a significant milestone for the cryptocurrency sector, which had anticipated regulatory hurdles.
The news has already made waves in the market, with the price of ether experiencing a notable surge. On Monday, ether’s value soared by as much as 18%, reaching $3,773.19 by Tuesday evening—a gain of over 20% within 24 hours.
The SEC faces looming deadlines to decide on applications filed by CBOE, with VanEck and ARK Investments/21Shares, by the end of the week. While the process typically involves two stages—exchange applications followed by ETF registration statements—the SEC’s engagement at this stage hints at a potential acceleration in the approval process.
The anticipation surrounding these ETFs stems from the SEC’s prior approval of ETFs tied to ether futures in October. However, market participants had braced themselves for rejection following discouraging interactions with the regulator. Notably, the SEC, led by crypto skeptic Gary Gensler, had historically rejected spot bitcoin ETFs over concerns of market manipulation. Yet, pressure mounted after Grayscale Investments won a legal battle last year, leading to the approval of bitcoin ETFs that swiftly attracted substantial investments.
Standard Chartered, a prominent financial institution, has doubled down on its prediction of ether ETF approval this week. Geoff Kendrick, Head of FX Research and Digital Assets Research at Standard Chartered Bank, estimates substantial inflows into ether upon approval, potentially ranging from 2.39 million to 9.15 million ether within the first year, equivalent to $15 billion to $45 billion in USD.
Moreover, Kendrick projects an optimistic outlook for ether’s price trajectory, suggesting that if ETFs receive approval, ether could maintain pace with bitcoin, with a projected price of $8,000 by the end of 2024. Looking further ahead, Standard Chartered’s analysis foresees an ether price of $14,000 by the end of 2025, aligning with their earlier forecasts.
However, amidst this optimism, Ruslan Lienkha, Chief of Markets at YouHodler, advises caution, predicting temporary heightened volatility in the market following the SEC’s decision. Lienkha suggests that while short-term fluctuations may occur, Ethereum’s long-term upward trend is likely to persist, particularly given its correlation with Bitcoin.
As the crypto market awaits the SEC’s verdict, all eyes remain on the regulatory body and its potential impact on the future of Ethereum and the broader cryptocurrency landscape.
