Key Points
Standard Chartered, a British multinational banking and financial services company, has projected that the US Securities and Exchange Commission (SEC) will likely approve Ethereum spot ETFs this week.
The bank also estimates that the approval of these spot ETFs could trigger significant market inflows.
These inflows could range from $15 billion to $45 billion in the first year alone.
Impact of Ethereum ETFs Approval
The bank also anticipates that this capital influx could significantly enhance Ethereum’s market dynamics.
This could potentially drive Ethereum’s price to the $8,000 mark by the end of 2024.
The bank’s bullish outlook is backed by the looming deadlines for the first round of spot Ethereum ETFs.
These deadlines include VanEck’s deadline on May 23 and Ark Invest/21Shares’ on May 24.
Geoff Kendrick, Head of FX Research and Digital Assets Research at Standard Chartered Bank, has expressed high confidence in the approval of these ETFs.
He estimates an “80% to 90%” probability of approval.
Kendrick noted that after approval, spot ETFs could drive inflows of 2.39-9.15 million ether in the first 12 months.
In U.S. dollar terms, this equates to approximately $15 billion to $45 billion.
As a percentage of market cap, it is similar to the bank’s estimates of inflows to Bitcoin ETFs, which have proven accurate.
Kendrick further explained that if the spot ETH ETFs are approved as anticipated, Ethereum could maintain its current price ratio with Bitcoin.
Bitcoin is projected to reach $150,000 by the end of 2024.
This projection places Ethereum at an $8,000 valuation by the end of the year.
Furthermore, with Standard Chartered’s forecast of Bitcoin reaching $200,000 by the end of 2025, Ethereum could also see its price rise to $14,000 over the same period.
This reaffirms the bank’s earlier price target in March.
Following the increased likelihood of Ethereum ETF approvals, the price of Ethereum has surged.
It crossed the $3,600 level for the first time since April 19.
This represents a more than 20% increase in the past 24 hours, pushing Ethereum’s market capitalization above $450 billion.
The market’s response to these developments has been overwhelmingly positive.
Derivative markets like Deribit are showing concentrated bets on Ethereum calls surpassing the $4,000 price mark.
The most favored strike price among these options traders is an ambitious $5,000, indicating strong bullish sentiment.
Bloomberg analysts have also increased optimism about the approval of spot ETH ETFs.
They unexpectedly increased the approval odds to 75%, a significant jump from the earlier 25% estimation.
This reassessment followed reports that the SEC is rapidly changing its stance, with exchanges being urged to update their 19b-4 filings swiftly.
According to Eric Balchunas, approval could come this Wednesday.
This signals a major shift in the regulatory landscape and could potentially set the stage for further gains in ETH’s price.
