Thomas Daniels
Analysts at QCP Capital, a prominent crypto trading firm, forecast that the unexpected approval of spot Ethereum ETFs could drive ETH’s price to $5,000 by the end of the year.
Should the U.S. Securities and Exchange Commission (SEC) greenlight spot Ethereum exchange-traded funds (ETFs), Ethereum’s native cryptocurrency, ETH, is poised to reach a short-term target of $4,000. In a May 21 analytical update, analysts from the Singapore-based firm emphasized that the second-largest cryptocurrency by market value might soar to $5,000 if the SEC delivers an unexpected approval. Conversely, a rejection could precipitate a sharp decline back to $3,000, where ETH has repeatedly found strong support around the $2,900 level.
“This uncertainty has resulted in higher volatility, but the better trade might be spot-futures basis which is now yielding above 10% again,” noted QCP Capital.
Following speculation about a possible approval, Ethereum’s price surged nearly 20%, reaching $3,650 on Tuesday. QCP Capital previously warned that a combination of market disinterest and the approval of spot Ethereum ETFs could “easily” propel ETH back to recent highs. The analysts cautioned that an unexpected approval might trigger a short squeeze, pushing ETH to unprecedented levels.
However, the SEC might still have a nuanced approach by distinguishing between Ethereum and staked Ethereum, potentially classifying the latter as a security. Alex Thorn, head of research at Galaxy Digital, suggested this strategy would align with the SEC’s ongoing legal battles and investigations, allowing the commission to approve Ethereum ETFs while adhering to its established regulatory stance.
