Spot Ethereum ETF Approval Unlikely But 'Bad News Already Priced In': Standard Chartered

While investors looking for an easy way into Ethereum ETH/USD via ETFs might face a wait, investment bank Standard Chartered remains optimistic about the future of digital assets.

What Happened: Despite revising their previous May timeline for US approval of Ether ETFs, the bank believes the market is well-positioned for a rebound, Coindesk reported. Prediction market Polymarket assigns only a 16% chance to a spot Ethereum approval by May 31.

Crypto Headwinds And Silver Linings

Standard Chartered analyst Geoff Kendrick, who had previously predicted a May 23 approval for spot Ether ETFs, highlighted several challenges impacting digital assets.

“The U.S. Securities and Exchange Commission (SEC) has targeted decentralized finance (DeFi) by suing Uniswap, U.S. Treasury yields have jumped, Federal Reserve rate cuts have been pushed back, and BTC and ETH — as risky assets — have been pulled lower by the escalation of the conflict in the Middle East,” Kendrick stated in a research report.

This array of negative factors has tempered the immediate outlook for Ethereum’s integration into mainstream financial products.

Despite these setbacks, Standard Chartered remains optimistic about the future of digital assets.

The bank reassures that the worst may be over for the markets, stating, “The bad news is already priced in for bitcoin and ether, and positive structural drivers are expected to take over again.”

They maintain a bullish end-of-year price target of $150,000 for Bitcoin and $8,000 for Ether, which were trading around $66,800 and $3,237 respectively at the time of the report.

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Why It Matters: The report also noted significant market adjustments, citing the largest daily liquidation of leveraged long positions in the Bitcoin futures market since October 2023, which occurred on April 13 in response to geopolitical tensions in the Middle East.

This event removed $261 million from the market, signaling a “much cleaner” market positioning moving forward.

Furthermore, the initial surge in Bitcoin spot ETF inflows has slowed, influenced by macroeconomic factors such as rising U.S. Treasury yields and ongoing geopolitical tensions.

While the first wave of ETF buying appears largely complete, the integration of these funds into broader macro funds is anticipated, although this transition may require some time.

What’s Next: As discussions on the future of digital assets continue, Benzinga’s upcoming Future of Digital Assets event on Nov. 19 will delve deeper into these topics, exploring how shifts in regulatory and market landscapes could shape the trajectory of cryptocurrencies like Bitcoin and Ethereum.

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