KEY POINTS
- The bank's analyst Kendrick said his earlier optimism was based on the SEC's attitude toward spot BTC ETFs
- Kendrick noted that unlike with Bitcoin ETFs, the regulator has not had publicized dialogue with spot ETH ETF applicants
- Standard Chartered was among many financial experts who predicted a May approval earlier this year
Cross-border banking giant Standard Chartered now doubts that the U.S. Securities and Exchange Commission (SEC) will approve spot Ethereum (ETH) exchange-traded funds (ETFs) by next month after it previously predicted the regulator will approve the much-anticipated ETFs in May.
"Bitcoin exchange-traded fund (ETF) inflows have stalled, and ether ETFs now look unlikely to be approved in May as expected," Standard Chartered analyst Geoff Kendrick wrote in a Tuesday report seen by CoinDesk. The said note is a stark difference from his March 18 report where he said Ethereum ETFs will likely get the SEC's blessing on May 23.
Kendrick went on to explain that his earlier view of the SEC's decision was based on the events that led up to the Bitcoin ETF approval, wherein the regulator went through constructive dialogue with applicants. "So far, however, no such dialogue occurred (or at least been made public), suggesting" that an approval on May 23 has largely become unlikely.
His change in stance just weeks after being bullish of spot ETH ETFs also came amid a two-week rollercoaster ride for the cryptocurrency space. A highly-volatile financial environment was rocked by global wars that effectively dragged down Bitcoin prices in the weekend of Iran's first direct attacks toward Israel. Several stocks were also affected by the Middle East conflict.
Bitcoin, the world's largest digital asset by market value, then went through its fourth halving cycle on Apr. 20 and didn't even move significantly even amid buzz among the industry's most prominent enthusiasts and holders.
On Tuesday, the SEC delayed making a decision on the Ether ETF applications of Grayscale and Franklin Templeton. "The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein," the regulator said in a filing.
The SEC was supposed to make a decision on Grayscale and Franklin Templeton's applications on April 27. The decision-making date has since been moved to June 11. While Standard Chartered may not have mentioned the said development from the SEC, but it could have affected Kendrick's growing pessimism over spot ETH ETFs being approved anytime soon.
Kendrick isn't the first industry expert to be less positive about spot Ethereum ETFs. Prominent Bloomberg analyst Eric Balchunas, who was 70% positive in January, said late last month he was 25% pessimistic about a May approval from the SEC and he would "go lower if I could."
