[Analyst says approval of spot Ethereum ETF could push ETH price to $5,000]
Ethereum prices could climb to $5,000 later this year if the U.S. Securities and Exchange Commission (SEC) unexpectedly approves a spot Ethereum ETF, analysts at crypto trading firm QCP Capital said.
In a May 21 analysis update, QCP Capital noted that if the SEC approves a spot ethereum exchange-traded fund (ETF), the price of ether could reach $4,000 in the short term. If final approval is given, the second-largest cryptocurrency by market capitalization could hit $5,000 by the end of the year. However, if financial regulators reject the ETF application, the market could fall back to $3,000, with Ethereum showing strong support multiple times at the $2,900 level.
"This uncertainty has led to increased volatility, but the better trade may be on a spot-futures basis, which is now again generating gains of over 10%," QCP Capital said.
The rumored possible approval sent Ethereum prices up nearly 20%, reaching $3,800 on Tuesday. QCP Capital warned that the market’s “lack of interest” response, coupled with the approval of a spot Ethereum ETF, could push ether back to recent highs. Analysts warned that the unexpected approval could trigger short-term pressure, pushing Ethereum to new highs.
Furthermore, the SEC may make a subtle distinction between Ethereum and collateralized Ethereum, classifying the latter as a security. According to Alex Thorn, head of research at Galaxy Digital, this strategy is consistent with the SEC’s legal strategy, allowing the commission to approve an Ethereum ETF while maintaining an established regulatory stance.
