Ethereum Price Analysis on May 22, 2024

On May 22, 2024, Ethereum (ETH) recorded a price of US$3,750.4, a 24-hour trading volume of US$32,138,286,532, and a market capitalization of US$451,456,865,331. The cryptocurrency experienced a 24-hour high of US$3,818.04 and a low of US$3,651.67. Over the past 24 hours Ethereum’s performance indicated a gain of 2.60%. In the weekly timeframe, Ethereum demonstrated a substantial increase of 22.7%.

Market Surge and Speculation

The surge in Ethereum's price comes amid widespread speculation regarding the outcome of applications for US spot exchange-traded funds (ETFs) tracking the world's second-largest cryptocurrency. This week, the US Securities and Exchange Commission (SEC) is expected to deliver its decision on several spot ether ETF applications later this week. Analysts and investors are speculating that the recent surge in Ethereum's price may be attributed to rumors suggesting that the SEC could approve these products, contrary to earlier expectations of rejection.

Efforts have been underway to establish an Ethereum spot exchange-traded fund similar to those for Bitcoin earlier in the year. The approval of such ETFs would make Ethereum more accessible to a broader array of investors, potentially driving further demand for the cryptocurrency.

Regulatory Outlook and Investor Sentiment

Despite long-standing expectations of regulatory pushback, the recent request by the SEC for potential issuers to update their filings is seen as a positive sign ahead of decision deadlines for at least two spot ETFs, one from VanEck and the other from Ark 21Shares. Bloomberg Intelligence ETF analyst Eric Balchunas noted a significant increase in the odds of approval, jumping from 25% to 75% in a single day. Additionally, the odds of acceptance by May 31 have risen to 61% on the Polymarket betting platform.

Standard Chartered's Head of FX Research, Geoff Kendrick, has maintained a bullish forecast for Ethereum, suggesting that ETF approvals could pave the way for ETH to reach US$8,000 by the end of the year. Kendrick predicts that ETF approval would drive significant inflows of US$15 billion to US$45 billion into Ethereum. He further reiterated his bullish outlook, suggesting that Ethereum could reach US$14,000 by the end of 2025.

Potential Impact of ETF Approval

ETF approvals for Ethereum have several implications for the cryptocurrency market. Kendrick suggests that inflow volatility would be minimal compared to Bitcoin funds, as Ethereum lacks investment alternatives that could compete with ETFs. This reduces the likelihood of significant price swings and outflows similar to those experienced by Bitcoin funds after an initial surge in demand.

Overall, the potential approval of Ethereum ETFs represents a significant milestone for the cryptocurrency market and could further solidify Ethereum's position as a leading digital asset. However, investors should remain cautious and monitor regulatory developments closely, as the outcome of the SEC's decision could have a significant impact on Ethereum's future price trajectory.