A cryptanalyst, Eric, believe ethereum (eth) could hit $20,000 in the next bull run. The analyst said that the possible launch of spot ethereum exchange-traded funds (ETFs) in the United States will fuel this rally.
ethereum up to $20,000 possible
In a post on X, Eric cited ethereum's historical tendency to mirror bitcoin (btc), albeit with a one-cycle delay. In the previous bull market, the analyst noted that bitcoin rose 22-fold, from $3,100 to $69,000. Therefore, if ethereum follows a similar trajectory, reaching $20,000 would be a realistic possibility.
As the analyst noted, ethereum's recent bear market low of $880 in 2022, if extrapolated using the 22x growth rate seen in btc, puts the coin at $19,360. However, the analyst believes that ethereum could exceed expectations, making $20,000 a base and a psychological round number to watch closely.
Supporting this forecast is the possible approval of an ethereum spot ETF. Like the bitcoin spot ETF, this authorization will likely attract institutional investors and significantly boost ethereum prices and liquidity. Institutional investors can gain exposure to ethereum through these complex derivative products without the complexities of directly trading or storing the currency.
While optimism remains, the United States Securities and Exchange Commission (SEC) will likely follow the same path it took before approving the first bitcoin ETF announcement in January. For context, the strict agency did not approve any spot bitcoin ETFs for more than ten years, citing risks of market manipulation and the absence of adequate monitoring tools.
Will the US SEC approve an ethereum spot ETF?
However, in a recent statement by The Block, Standard Chartered, a global bank, said the US SEC will likely approve the first ethereum ETF in May 2023. By then, the bank added, eth prices They will trade at around $4,000, driven by general market optimism.
The bank notes that the fact that the agency does not classify eth as a security adds weight to this expectation. At the same time, Grayscale Investments, which issues Grayscale ethereum Trusts (ETHE), wants to convert this product into an ETF. Each share was trading at around $20 as of January 30.
Previously, Grayscale won against arguments from the US SEC, which wanted to prevent the conversion of its bitcoin Trust into an ETF. This victory set in motion the eventual approval of the first bitcoin spot ETF in the United States.
Additionally, the fact that the ethereum Futures ETFs were recently approved and listed on the Chicago Mercantile Exchange is a net benefit, paving the way for a possible listing in May 2024.
Featured image from Canva, TradingView chart
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