Author: Nan Zhi, Odaily Planet Daily

Latest Updates

BTC Spot ETF Route Replaying?

This morning, Bloomberg ETF analyst James Seyffart posted on X platform: "Five potential Ethereum spot ETF issuers have submitted 19 b-4 amendment filings to the U.S. SEC via Cboe BZX, including: Fidelity, VanEck, Invesco/Galaxy, Ark/21 Shares, and Franklin." The DTCC official website has also listed VanEck's spot Ethereum ETF "VANECK ETHEREUM TR SHS" (code: ETHV).

On the other hand, as the SEC's approval expectations for Ethereum spot ETFs heat up, the Grayscale Ethereum Trust (ETHE) negative premium rate has narrowed to 11.82%. According to relevant sources, Grayscale has submitted an update to the Ethereum mini trust 19 b-4 form to the U.S. Securities and Exchange Commission, confirming that its Ethereum mini trust will not directly or indirectly participate in ETH staking.

In a previous document, Grayscale had suggested to investors that they could stake Ethereum through the trust fund, but this wording was absent in the preliminary proxy statement submitted by Grayscale on Tuesday after the amendment. Other issuers, including Fidelity, have taken similar actions (removing staking-related content).

Yesterday, according to insider @tier 10 k disclosed on X platform, the U.S. Securities and Exchange Commission has informed exchanges that they are inclined to approve the spot Ethereum ETF.

Three informed sources stated that SEC officials unexpectedly requested Nasdaq and the Chicago Board Options Exchange (CBOE) to quickly update and amend their spot Ethereum ETF listing application documents on Monday, which is typically a request made before approval, suggesting that the agency may be ready to approve the applications from these two companies. The SEC must decide whether to approve the CBOE's listing applications for the VanEck and ARK Investments/21 Shares ETFs by this weekend, as exchanges need SEC approval for their amended rules to list products, while issuers still need SEC approval for ETF registration statements to begin trading. Unlike the documents submitted by exchanges, the SEC does not have a definitive decision timeline, meaning that the spot Ethereum ETF may still take months to begin trading.

Ethereum Classification Remains a Key Issue

According to several relevant sources, the classification of Ethereum as a commodity or security remains unresolved, which is why we see various applicants in the previous section actively seeking changes to remove terms related to Ethereum's securities characteristics. Some viewpoints are as follows:

Scott Johnsson, partner at Van Buren Capital and financial lawyer, stated that the relevant application documents indicate that the Ethereum spot ETF will still be listed under the "commodity-based trust shares" rule.

Jake Chervinsky, Chief Legal Officer at Variant Fund, commented that this means if the U.S. SEC approves the Ethereum spot ETF, it will have to acknowledge that non-staked ETH is not a security. This would be a significant policy move for the SEC, which has previously refused to recognize any assets other than Bitcoin as non-security commodities.

Adam Cochran, founder of Cinneamhain Ventures, noted that SEC Chairman Gary Gensler's continued lack of clarity on Ethereum regulation and the SEC's unstable and ambiguous stance on Ethereum classification could hinder innovation in the cryptocurrency space and create significant uncertainty. Notably, Ethereum is currently under investigation by the SEC to determine whether it should be classified as a security.

Election Becomes a Major Factor in Regulatory Attitude Shift

Haseeb Qureshi, partner at Dragonfly, stated that the regulatory attitude shift towards Ethereum ETFs indicates a softening of the Biden administration's stance on crypto policy, as they do not want to lose votes over trivial matters (referring to crypto regulation) in the election competition.

Qureshi added: "In the coming months, the market will see other regulatory agencies also shift their attitudes. Note that this is not a complete reversal. As long as the differences can be reduced, it's fine. Trump will definitely be more supportive of cryptocurrencies, but Biden will soften to the point where he won't completely lose the crypto vote."

Market Outlook

Standard Chartered: If Approved, ETH Will Rise to $8,000 by Year-End

Standard Chartered expects the U.S. Securities and Exchange Commission to approve the Ethereum ETF this week. Geoff Kendrick, head of foreign exchange research and digital asset research at Standard Chartered, stated that if the Ethereum spot ETF is approved, it is expected that 2.39 million to 9.15 million ETH will flow in over the first 12 months, equivalent to about $15 billion to $45 billion in USD.

Kendrick stated: "In terms of market cap share, this is similar to our estimates for the inflow of Bitcoin ETFs, and these estimates are proving to be accurate."

Moreover, if the Ethereum ETF is approved this week, it is expected that Ethereum will maintain its price ratio with Bitcoin, and Ethereum will reach $8,000 by the end of 2024.

Kendrick stated: "Given that we now expect Bitcoin to reach $150,000 by the end of 2024, this would mean Ethereum's price will reach $8,000."

Su Zhu: Target Price $5,400

Su Zhu posted on X platform that the ETH price has started to rise, and he previously mentioned that if the Ethereum spot ETF is indeed approved, ETH will rise 80% from $3,000 to $5,400, while BTC will rise to $80,000 (ETH/BTC ratio will reach 0.0675), which would also be a new high for ETH price.

Kryptanium Capital Founder: Best Strategy is to Buy SOL/ETH if Approved

Daniel Yan, founder of Kryptanium Capital, stated that if the Ethereum ETF is approved within two days, the best trading strategy is to "buy SOL/ETH." The reasons are as follows: ETH has risen nearly 20% in the past 24 hours; SOL will be the next beneficiary after the ETH ETF approval; ETH/BTC rose 12% within a week after the BTC spot ETF approval, as people anticipate the ETH ETF (approval); this strategy has lower market participation and is not a hot trade.

He also reminded that BTC price fell 15% within weeks after the spot ETF approval on January 10.

QCP Capital: $1,000 Price Fluctuation Based on Approval Status

QCP Capital stated that regarding the rumors of the U.S. Securities and Exchange Commission (SEC) possibly approving the Ethereum spot ETF, QCP Capital's view is that the Ethereum spot price is unlikely to stabilize here; if the spot ETF is approved, Ethereum's price will be closer to a short-term target of $4,000, and may reach $5,000 later this year; if it fails to get approved, Ethereum's price will fall back to $3,000. This uncertainty has led to higher volatility, but better trades may be in the spot-futures basis, as yields have once again exceeded 10%.