Markets
Ethereum ETF Applications on Fast Track? SEC Action Boosts Crypto Market Prices
The cryptocurrency world is abuzz with excitement as the US Securities and Exchange Commission (SEC) surprises everyone by urging Nasdaq and CBOE to adjust their applications for spot Ethereum ETFs. This unexpected move sparked speculation that the SEC could be preparing to greenlight these filings.
SEC surprise move: approval tips?
On Monday, the SEC caught many off guard by ordering adjustments to 19b-4 filings for spot Ethereum ETFs. This directive fueled rumors that the regulatory body could be moving towards approving these ETFs before critical deadlines. The first round of deadlines includes VanEck’s application due on May 23 and Ark Invest/21Shares on May 24.
Eleanor Terrett’s report clarifies the urgency, stating:
“Issuers/hearing exchanges have until 10:30 a.m. today to update 19b-4 filings. It appears that staking has been banned based on Fidelity’s update. I’ve also heard there was *some* involvement in the S-1s, but it’s unclear how substantive.”
Market Response: Ether Surge
The SEC’s request for updates has already had a significant impact on the market, with the price of Ether rising as much as 18% on Monday, followed by another 2.5% increase on Tuesday, reaching a peak of $3,764. These price swings reflect growing optimism among investors about the potential approval of spot Ethereum ETFs.
According to Reuters,
“The US securities regulator on Monday asked Nasdaq and CBOE to adjust their applications to list spot exchange-traded funds (ETFs), signaling that the agency may be ready to approve the listings, three told Reuters. people familiar with the process. ”
Politics at stake
The SEC’s decision left many surprised, especially given SEC Chairman Gary Gensler’s cautious approach to cryptocurrency. However, there appears to be a change in the political landscape, as Jake Chervinsky suggests.
Analyst predictions
Amid speculation, Bloomberg analysts James Seyffart and Eric Balchunas raised the ETF’s odds of approval from 25% to 75%, citing recent developments. They highlight three main factors: bipartisan opposition to the SEC’s previous positions, lack of prior engagement between exchanges and the SEC, and ARK’s recent removal of the stake from its ETF registration.
Standard Chartered’s Geoff Kendrick expresses strong confidence, estimating an 80% to 90% probability of SEC approval this week. He predicts potential inflows of up to $45 billion into 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 projection of $14,000 for 2025, tied to an expected Bitcoin price of $150,000 by the end of 2024 and U.S. $200,000 by the end of 2025.
Implications for the crypto market
The approval of Ethereum ETFs in cash could bring significant changes to the cryptocurrency landscape. This would signal a strong endorsement of Ethereum by US regulators, likely leading to strong inflows from institutional and retail investors. With increased liquidity and legitimacy, the price of Ethereum is expected to rise, dragging other cryptocurrencies with it.
Jesse Eckel aptly summarizes,
“Even if you don’t own ETH, you should be concerned about it. Because when ETH goes up, everything else will go up too. There will be a huge wealth effect that will spread to every corner of crypto. Solana, Avalanche, etc included. What’s good for ETH is good for everyone.”
Bullish or bearish in the future of Ethereum? Rate your prediction!