- Standard Chartered believes that Ethereum has room to run to $4,000.
- The analyst cited a potential spot Ethereum ETF approval by May.
- The risk is that the SEC sees Ethereum as a financial security.
A crypto analyst who has been highly accurate in the past delivered a strong Ethereum price prediction on Tuesday. In a note, the Standard Chartered analyst noted that ETH price has the potential to hit $4,000 by May if the SEC gives a greenlight of an Ethereum spot ETF.
Standard Chartered ETH price prediction
If the analyst is correct, it means that Ethereum will need to rise by more than 71% from the current level of $2,337. Such a move will also trigger similar moves for other Ethereum-related cryptocurrencies like Ethereum Classic (ETC), Ethereum PoW (ETHW), and Ethereum Name Service (ENS). In most cases, these coins tend to move in the same direction.
Most analysts believe that the SEC will consider allowing Ethereum’s ETFs by following its precedence since it recently approved 11 spot Bitcoin ETFs. However, there is a big difference between BTC and ETH. The SEC views BTC as a digital commodity while it sees Ethereum as a financial security that should be regulated more.
According to the SEC, Ethereum became a security after the merge, which connected the previous proof-of-work (PoW) network with the beacon chain. As a result, Ethereum introduced the concept of staking that enables people to earn a return for just holding the ETH coin.
The SEC believes that any asset that offers such a return should be regulated to protect holders. For example, who determines the monthly return of the coin? Therefore, it is unclear whether the SEC will approve a spot Ethereum ETF in the near term. Companies like Ark Invest and Blackrock have filed for these ETFs.
An Ethereum ETF makes sense
A case for a spot Ethereum ETF can be made, especially after the approval of a Bitcoin one. For example, it is the second-biggest cryptocurrency in the world with a market cap of over $200 billion. Unlike other altcoins, Ethereum is a highly liquid coin that has been around for more than a decade. It is also held widely by many crypto investors.
Ethereum plays a pivotal role in the crypto industry. For example, while its network has lower transaction speeds and high costs, it powers key areas in the industry. It is the biggest part in the Decentralized Finance (DeFi) industry. Some of the key Ethereum DeFi networks are Compound, Maker, Uniswap, and AAVE.
Ethereum also powers the gaming and NFT industry. However, the key challenge is that it is facing substantial competition from other layer 1 networks like Solana, Avalanche, and Cronos. For example, Solana is taking some market share in an industry like meme coin. Solana tokens like Wen and Bonk have become some of the most popular meme coins in the sector.
The Standard Chartered analyst has been quite successful. A few months ago, he predicted that Bitcoin price would surge to $50,000 after the ETF approval. While it did not get to $50k, it moved to over $49k and analysts expect it to bounce above $50k soon.
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