Ethereum
Ethereum ETF applications on the fast track? SEC Action Raises Crypto Market Prices
The cryptocurrency world is abuzz as the U.S. Securities and Exchange Commission (SEC) surprises everyone by prompting Nasdaq and CBOE to tweak their applications for Ethereum spot ETFs. The unexpected move has sparked speculation that the SEC may be preparing to green-light these filings.
Surprise move from the SEC: a hint at approvals?
On Monday, the SEC caught many off guard by requesting adjustments to 19b-4 filings for Ethereum spot ETFs. This directive has fueled rumors that the regulator could move towards approving these ETFs before critical deadlines. The first set of deadlines includes VanEck’s application due on May 23 and Ark Invest/21Shares’ application on May 24.
Eleanor Terrett’s report highlights the urgency, stating:
“Heard issuers/exchanges have until 10:30 a.m. today to update 19b-4 filings. Looks like staking was banned based on Fidelity’s update. We also heard that there were *some* commitments on S-1s, but it’s unclear how substantial they were.
Market response: rise of ether
The SEC’s request for updates has already had a significant impact on the market, with the price of Ether surging as much as 18% on Monday, followed by another 2.5% rise early Tuesday, peaking at $3,764. These price swings reflect growing investor optimism about the potential approval of Ethereum spot ETFs.
According to Reuters,
“The U.S. securities regulator on Monday asked Nasdaq and CBOE to refine their applications for listing spot ether exchange-traded funds (ETFs), signaling that the agency may be close to approving filings, three people familiar with the process told Reuters.”
Politics at stake
The SEC’s decision surprised many people, especially given SEC Chairman Gary Gensler’s cautious approach to cryptocurrencies. However, there appears to be a shift in the political landscape, as Jake Chervinsky suggests.
Analyst predictions
Amid speculation, Bloomberg analysts James Seyffart and Eric Balchunas increased the ETF’s chances of approval from 25% to 75%, citing recent developments. They highlight three key factors: bipartisan opposition to the SEC’s previous positions, the lack of prior engagement between exchanges and the SEC, and ARK’s recent removal of staking from its ETF filing.
Standard Chartered’s Geoff Kendrick expresses high confidence, estimating an 80-90% chance of securing SEC approval this week. It projects potential inflows of up to $45 billion for Ethereum in the first year after the ETF is approved.
Kendrick also predicts significant price movements for Ethereum, projecting a year-end target of $8,000 and a 2025 projection of $14,000, tied to an expected Bitcoin price of $150,000 by the end of 2024 and $200,000 by the end of 2025.
Implications for the crypto market
The approval of Ethereum spot ETFs could lead to significant changes in the cryptocurrency landscape. This would signal a major approval of Ethereum by US regulators, which would likely lead to large inflows from institutional and retail investors. With increased liquidity and legitimacy, the price of Ethereum is expected to rise, bringing other cryptocurrencies with it.
Jesse Eckel sums it up well:
“Even if you don’t own any ETH, you should care. Because when ETH goes up, everything else will go up too. There will be a massive wealth effect that will ripple into every corner of crypto. Solana, Avalanche, etc. included. What’s good for ETH is good for everyone.
Bullish or bearish on the future of Ethereum? Comment with your prediction!