Ethereum spot ETF market outlook: After approval, it may rise to $8,000 this year

Original title: "Ethereum spot ETF latest developments and market forecast: issuers submit revised documents, with a maximum target price of $8,000"

Original author: Nan Zhi, Odaily Planet Daily

 

Latest developments

 

BTC spot ETF route repeats?

 

This morning, Bloomberg ETF analyst James Seyffart posted on the X platform: "Five potential Ethereum spot ETF issuers have submitted 19 b-4 revised documents to the US SEC through Cboe BZX, including: Fidelity, VanEck, Invesco/Galaxy, Ark/21 Shares and Franklin." The DTCC official website has also listed the VanEck spot Ethereum ETF "VANECK ETHEREUM TR SHS" (code ETHV).

 

On the other hand, as the SEC's expectations for the Ethereum spot ETF have increased, the negative premium rate of Grayscale Ethereum Trust (ETHE) has narrowed to 11.82%. According to relevant sources, Grayscale has submitted an update to the Ethereum Mini Trust 19 b-4 form to the US Securities and Exchange Commission, confirming that its Ethereum Mini Trust will not directly or indirectly participate in ETH staking.

 

In a previous document, Grayscale had proposed to investors that Ethereum could be pledged through the trust fund, but this wording was not included in the revised preliminary proxy statement submitted by Grayscale on Tuesday. Other issuers, including Fidelity, have also taken similar measures (removing pledge-related content).

 

Yesterday, according to a source @tier 10 k disclosed on the X platform, the US Securities and Exchange Commission has informed exchanges that they are inclined to approve the spot Ethereum ETF.

 

Officials at the U.S. Securities and Exchange Commission (SEC) unexpectedly asked Nasdaq and the Chicago Board Options Exchange (CBOE) on Monday to quickly update and revise their spot Ethereum ETF listing documents, three people familiar with the matter said. This is usually a request before approval, suggesting that the agency may be ready to approve the two companies' applications. The SEC must decide by the end of this week whether to approve the VanEck and ARK Investments/21 Shares ETF listing applications submitted by CBOE. The exchanges need the SEC to approve their revised rules before they can list the products, while the issuers still need the SEC to approve the ETF registration statement before trading can begin. Unlike the documents submitted by the exchanges, the SEC has no definite time frame for its decision, which means that it may take several months for the spot Ethereum ETF to begin trading.

 

Ethereum attributes remain a key issue

 

According to several relevant sources, the classification of Ethereum as a commodity or security is still unresolved, so we can see in the previous section that the ETFs in various applications have actively sought changes and removed clauses related to the characteristics of Ethereum securities. Some of the views are as follows:

 

Scott Johnsson, partner and financial lawyer at Van Buren Capital, said that the relevant application documents show that the Ethereum spot ETF will still be listed under the "commodity-based trust share" rules.

 

Jake Chervinsky, chief legal officer of Variant Fund, said that this means that if the US SEC approves the Ethereum spot ETF, it will have to admit that non-pledged ETH is not a security. This will be a major policy move by the SEC, which has previously refused to recognize any asset other than Bitcoin as a non-security commodity.

 

Adam Cochran, founder of Cinneamhain Ventures, said that the continued lack of clarity in the regulation of Ethereum by Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), and the SEC's unstable and ambiguous stance on the classification of Ethereum may hinder innovation in the cryptocurrency field and create great uncertainty. It is worth noting that Ethereum is currently under investigation by the U.S. SEC to determine whether it should be classified as a security.

 

The election has become the main factor in the change of regulatory attitudes

 

Dragonfly partner Haseeb Qureshi said that the change in regulatory attitudes towards Ethereum ETFs indicates that the Biden administration has softened its crypto policy because they do not want to lose votes in the election competition because of trivial matters that are innocuous to them (referring to crypto regulatory issues).

 

Qureshi added: "In the coming months, the market will see other regulators change their attitudes. Note that this is not a complete reversal. As long as the differences can be reduced, it will be fine. Trump will definitely be more supportive of cryptocurrencies, but Biden will soften to the point where he will not completely lose votes for cryptocurrencies."

 

Market outlook

 

Standard Chartered Bank: If approved, ETH will rise to $8,000 by the end of the year

 

Standard Chartered Bank expects the U.S. Securities and Exchange Commission to approve the Ethereum ETF this week. Geoff Kendrick, head of foreign exchange research and digital asset research at Standard Chartered Bank, said that if the Ethereum spot ETF is approved, it is expected that there will be inflows of 2.39 million to 9.15 million ETH in the first 12 months, equivalent to about 15 billion to 45 billion U.S. dollars in U.S. dollars.

 

Kendrick said: "In terms of market capitalization, this is similar to our estimates of fund inflows for Bitcoin ETFs, and these estimates are proving to be accurate."

 

In addition, if the Ethereum ETF is approved this week, Ethereum is expected to maintain its price exchange rate with Bitcoin, and Ethereum will reach $8,000 by the end of 2024.

 

Kendrick said: “Given that we now expect Bitcoin to reach $150,000 by the end of 2024, this will mean that the price of Ethereum will reach $8,000.”

 

Su Zhu: Target price $5,400

 

Su Zhu posted on the X platform that the price of ETH has begun to rise. He mentioned before that if the Ethereum spot ETF is really approved, then ETH will rise 80% from $3,000 to $5,400, and BTC will rise to $80,000 (ETH/BTC exchange rate will reach 0.0675), which will also be a new high for ETH prices.

 

Kryptanium Capital founder: If approved, the best strategy is to buy SOL/ETH

 

Kryptanium Capital founder Daniel Yan said that if the Ethereum ETF is approved within two days, the best trading strategy is to "buy SOL/ETH". The reasons are as follows: ETH has risen nearly 20% in the past 24 hours; SOL will be the next beneficiary after the ETH ETF is approved; ETH/BTC rose 12% in a week after the BTC spot ETF was approved because people were looking forward to the ETH ETF (approval); the strategy has low market participation and is not a hot trade.

 

He also reminded that the BTC price fell 15% in the weeks after the spot ETF was approved on January 10.

 

QCP Capital: There will be a price fluctuation of $1,000 depending on the approval

 

QCP Capital issued a statement saying that regarding the rumors that the U.S. Securities and Exchange Commission (SEC) may approve (Ethereum spot ETF), QCP Capital's view is that Ethereum spot prices are unlikely to stabilize here; if the spot ETF is approved, Ethereum prices will be closer to the short-term target of $4,000, or $5,000 later this year; if it is not approved, Ethereum prices will fall back to $3,000. This uncertainty has led to higher volatility, but a better deal may be the spot futures basis, which now yields more than 10% again.

 

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