Investment bank Standard Chartered predicts that U.S. regulators will likely not authorize exchange-traded funds (ETFs) that allow investors to access Ethereum’s ether (ETH) in May, despite earlier expectations that the Securities and Exchange Commission would grant approval at that time.The largest cryptocurrency saw a surge in value in January with the approval of spot bitcoin (BTC) exchange-traded funds.Despite this, Standard Chartered is not pessimistic about the future of an ether ETF.In recent weeks, digital assets have faced a perfect storm of unfavorable headwinds, but Standard Chartered stated in a research paper on Tuesday that the worst is behind us and the industry is well-positioned to rebound.
“Bitcoin exchange-traded fund (ETF) inflows have stalled, and ether ETFs now look unlikely to be approved in May as expected,” analyst Geoff Kendrick wrote. The analyst had previously said that ether spot ETFs would likely gain approval on May 23, according to a March 18 report.
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 said.
However, the bank claims that “positive structural drivers” are anticipated to regain control and that the bad news has already been included into the price of ether and bitcoin.The business restated its $150,000 end-of-year target price for bitcoin and its $8,000 projection for ether.At the time of publication, ether was trading close to $3,237 while bitcoin was trading about $66,800.The article stated that in response to Iran’s attack on Israel, $261 million worth of leveraged long bets were liquidated from the bitcoin futures market on April 13, making the market positioning more cleaner than it was previously.Since October 2023, this was the biggest daily liquidation.
Inflows into Bitcoin spot ETFs have probably decreased for macroeconomic reasons, the research stated.These include the Middle East’s geopolitical unrest and rising yields on US Treasury bonds.
Additionally, the bank stated that the first wave of ETF purchases may be almost finished, meaning that the market’s primary driver has temporarily stopped.Incorporating these ETFs into larger macro funds will be the next wave of buying, but this may take some time.