The Securities and Exchange Commission (SEC) is poised to take a similar approach in approving spot Bitcoin (BTC) exchange-traded funds (ETFs) for spot Ethereum ETFs, with the expectation that approval will be awarded on the initial final deadline of May 23, according to Standard Chartered Bank’s analysis.
Ethereum ETFs Face Delays, Approval Remains Likely
According to a report by The Block, Geoffrey Kendrick, head of forex and digital asset research at Standard Chartered Bank, stated that they expect pending applications for spot Ethereum ETFs to be approved on May 23, which is considered the equivalent date to January 10 for Bitcoin ETFs .
Additionally, Kendrick predicts that if Ethereum prices follow a similar trajectory to Bitcoin leading up to ETF approval, Ethereum could trade as high as $4,000 by the indicated date.
Kendrick further supports the approval of spot Ethereum ETFs based on the SEC’s classification of ether as one non-security in its legal actions against crypto companies.
Furthermore, the fact that Ethereum is listed as a regulated futures contract on the Chicago Mercantile Exchange (CME) adds weight to the expectation of approval.
Along the same lines, Scott Johnsson, a financial attorney, offered insights into the potential roadmap for Ethereum ETFs. Johnsson emphasized that while long-term approval for spot Ethereum ETFs is highly likely, there could be short-term delays due to ongoing regulatory actions regarding the Coinbase/Binance stock exchanges.
Shorter path for ETH ETF approvals?
Johnsson marked the regulatory path from a regular digital asset to a spot ETF offering, with Bitcoin as an example. Johnsson noted that the process for Bitcoin took seven years, with multiple steps and rejections along the way.
However, Johnsson noted that the timeline for Ethereum is narrowing, with applications open for both futures ETFs and spot ETFs. He suggested certain conditions that Johnsson said may no longer be necessary for spot approval, such as Step 3, which would require the SEC to issue a formal 19b-4 approval for the futures ETF.
Johnsson highlighted two key factors in understanding the SEC’s current approach to future approvals, including Ethereum. First, he discussed the threshold question in the context of the Grayscale pronunciationwhich focused on correlation analysis.
Second, Johnsson highlighted the SEC’s view as bounded by BTC’s recent approval order, which takes into account correlation with the CME, a long sample period, intraday trading data, and consistency throughout the sample period.
While the specific adequacy threshold remains unknown, the correlation analysis for Bitcoin is within an acceptable range. Therefore, it is expected that Ethereum will likely comply threshold value in the near future, Johnsson suggests.
Once the required level of correlation is reached, Johnsson believes approval for spot Ethereum ETFs will likely follow shortly afterwards, with May being the expected month of approval.
Overall, industry analysts and experts suggest that the SEC’s approval of spot Ethereum ETFs is a matter of time, barring any major legal shifts.
ETH is currently trading at $2,370, up over 2% in the last 24 hours and over 7% in the last seven days, following the lead of Bitcoin.
Featured image from Shutterstock, chart from TradingView.com
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