Standard Chartered reverses stance, now says SEC unlikely to approve spot Ethereum ETFs in May

Funds • April 23, 2024, 2:59PM EDT

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Quick Take

Standard Chartered has revised its outlook and no longer anticipates the approval of spot Ethereum ETFs in May.
However, the bank maintains an optimistic view in the long run, expecting eventual approval.

Standard Chartered Bank, previously optimistic, has now changed its stance on spot Ethereum exchange-traded funds, saying the U.S. Securities and Exchange Commission is unlikely to approve such funds in May.

"We had previously expected the SEC to approve ETH ETFs on May 23," Geoffrey Kendrick, head of Standard Chartered Bank's forex and digital assets research, wrote in a report on Tuesday.

"This was based on the view that the ETH approval process would follow a similar trajectory to BTC ETF approval (which the SEC granted in January), and that constructive dialogue would take place between the SEC and the ETF applicants, as it did in the lead-up to BTC ETF approval. So far, however, no such dialogue has occurred (or at least been made public), suggesting that a May 23 approval date is unlikely," Kendrick added.

SEC delays

Earlier Tuesday, the SEC delayed making a decision on spot Ethereum ETF proposals from Franklin Templeton and Grayscale, pushing the timeline on Franklin Templeton's ETF to June 11 and Grayscale's ETF to June 23, after which the regulator could approve, disapprove or institute proceedings.

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Last month, the SEC also delayed decisions on applications for other spot Ethereum ETFs, including those from VanEck and BlackRock.

Standard Chartered is not alone in fading optimism regarding spot Ethereum ETF approval in May. Last month, Bloomberg senior ETF analyst Eric Balchunas said his odds for May approval remain pessimistic at 25%, down from 70% in January. Also last month, Galaxy Digital's head of firmwide research, Alex Thorn, said approval for a spot Ethereum ETF in May seems "extremely unlikely."

Expects eventual approval

Over the long term, however, Standard Chartered remains optimistic about spot Ethereum approval, similar to JPMorgan. Standard Chartered also maintains its year-end target price levels of $150,000 for bitcoin and $8,000 for ETH.

"The gradual removal of negative drivers should allow bullish structural drivers of BTC to take over," Kendrick wrote in the report. "A higher BTC price would also boost ETH; and even if the US ETF is not approved in May, the global environment for ETFs continues to improve, and we expect eventual U.S. approval," he concluded.

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