According to analysts at the cryptocurrency trading firm QCP Capital, the potential approval of spot Ethereum ETFs could lead to a surge in the price of ETH, possibly reaching $5,000 later this year.
If the U.S. Securities and Exchange Commission (SEC) gives the green light to spot Ethereum exchange-traded funds (ETFs), Ethereum’s native cryptocurrency ETH could target the $4,000 mark as a short-term goal. In a recent analysis on May 21, the experts at the Singapore-based firm suggested that ETH, the second-largest cryptocurrency by market capitalization, could see a significant price increase if the SEC surprises the market with its approval. On the other hand, a rejection of the ETF applications could result in a drop back to $3,000, where ETH has previously found solid support at the $2,900 level.
Recent rumors of a possible ETF approval caused Ethereum’s price to jump by nearly 20%, reaching $3,650. QCP Capital had previously warned of a lack of interest in the market, but acknowledged that approval of spot Ethereum ETFs could easily push ETH back to its recent highs. The analysts also cautioned that a sudden approval could trigger a short squeeze, propelling ETH to new record levels.
Despite this optimistic outlook, the SEC may still have some regulatory tricks up its sleeve. One potential strategy could involve making a distinction between Ethereum and staked Ethereum, with the latter being classified as a security. Alex Thorn, head of research at Galaxy Digital, believes this approach would allow the SEC to approve Ethereum ETFs while addressing their ongoing legal battles and investigations.
In related news, Polygon’s zkEVM is set to enhance Ethereum scalability, according to Paul O’Leary.