Ethereum
Ethereum Price Forecast Amid Possible ETF Approval By Investing.com
Cryptocurrencies surged Tuesday amid growing optimism about upcoming SEC decisions on spot exchange-traded fund (ETF) applications, with the first decision expected this week. Following these reports, analysts are expressing their expectations about the impact of possible approval on Ethereum prices.
Ethereum ETF saga sees new developments
Tuesday’s crypto rally was primarily led by Ether, as the world’s second-largest crypto asset surged more than 22% to $3,781.
Adding to the speculation was a report from CoinDesk, which, citing sources familiar with the matter, indicated that the SEC had asked exchanges to update their 19b-4 filings on an expedited basis, signaling the potential approval of these requests before a key deadline. THURSDAY.
However, this does not guarantee the authorization of Ethereum ETFs, the report adds.
Issuers must also have their S-1 applications approved before products can begin trading. The SEC may take an indefinite amount of time to approve S-1 filings because it is not bound by a deadline, according to the report.
A company in discussions with the SEC reportedly suggested it might be on track for approval, a notable change from previous weeks when it felt the SEC was delaying.
Bloomberg Intelligence ETF analysts increased the Ethereum ETF’s spot approval odds from 25% to 75% after learning that the SEC may take a more favorable stance toward the applications.
The broader crypto market has followed Ethereum’s price gains. climbed 6% on the day, while ADA and DOGE jumped 5.8%, 6.9%, and 10.3%, respectively.
“This sudden turnaround in expectations is an unexpected boon for investors who were calling for a lifeblood after the crisis. [Bitcoin] the halving was passed and Bitcoin ETFs were launched in the US and Hong Kong,” said Antoni Trenchev, co-founder and managing partner of Nexo.
“If spot ETH ETFs are approved, altcoins should take off as ether is often a leading indicator for the rest of the crypto market.”
If the reports are true, this marks significant progress from previous expectations, as many expected the SEC to deny Ethereum ETF applications this week due to concerns over the complexity and regulatory challenges associated with Ether compared to Bitcoin.
Further complicating the issue is the lack of similar legal precedent for the Bitcoin ETF approval, with SEC Chairman Gary Gensler recently emphasizing the need to protect investors and comply with laws on securities.
Ethereum Price Forecast
Commenting on the aforementioned developments, Bernstein analysts said on Tuesday that given Bitcoin’s 75% rise since the ETF’s approval, they would expect a similar rise in Ethereum prices. Additionally, they note that the free float and supply of ETH appears even more attractive than that of Bitcoin.
“ETH since its transition to proof of stake has been deflationary. Additionally, 38% of ETH is locked in staking, financial smart contracts, and layer 2 chains – a feature unique to programmable ETH and not visible with Bitcoin,” Bernstein analysts said.
“66% of ETH supply has not moved over the last year (similar holding behavior to Bitcoin) and supply on exchanges is at an all-time low. Thus, the supply of ETH remains limited by sticky investors and by utilities blocking supply in smart financial contracts,” they added.
Earlier this year, analysts at Standard Chartered (OTC:) said they expected the SEC to approve Ethereum ETFs on May 23, which matches the timeline for Bitcoin ETFs approved in January 2024.
The bank predicted significant inflows for the crypto asset, estimating between 2.39 million and 9.15 million ETH, representing between $15 billion and $45 billion, in the first year following approval.
If approved, Standard Chartered predicts that Ethereum prices will keep pace with BTC, maintaining the current price ratio of 5.4% until 2024. Given their prediction that BTC will reach 150,000 $ by the end of 2024, this implies an Ethereum price of around $8,000.