Ethereum ETF Approval Could Propel ETH to $5,000 by Year’s End

Analysts at QCP Capital suggest that the unexpected approval of spot Ethereum ETFs could drive ETH prices to $5,000 “later in the year.”

The price of Ethereum‘s native cryptocurrency, ETH, might target the $4,000 mark as a “natural short-term target” if the U.S. Securities and Exchange Commission (SEC) approves spot Ethereum exchange-traded funds (ETFs).

In an analytical update on May 21, analysts at the Singapore-based trading firm stated that the second-largest cryptocurrency by market value could eventually reach $5,000 later this year if the SEC surprises the market with its approval. However, if the financial regulator rejects applications for the ETFs, the market might see a decline back to $3,000, where ETH has repeatedly shown 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.”

Following rumors of a potential approval, Ethereum’s price surged nearly 20%, reaching $3,650 on Tuesday. QCP Capital previously indicated that a “resounding lack of interest” in the market combined with the approval of spot Ethereum ETFs could potentially boost ETH back to recent highs. The analysts warned that an unexpected approval might trigger a short squeeze, pushing ETH to new heights.

However, the SEC may still introduce a nuanced distinction between Ethereum and staked Ethereum, classifying the latter as a security. According to Alex Thorn, head of research at Galaxy Digital, this strategy would align with the SEC’s ongoing legal battles and investigations, allowing the commission to approve Ethereum ETFs while maintaining its established regulatory stance.

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