U.S. regulators probably won’t approve ETFs that give investors access to Ethereum’s ether (ETH) in May, according to investment bank Standard Chartered, which had previously expected the Securities and Exchange Commission to give its blessing then.

Approval of spot bitcoin (BTC) exchange-traded funds in January helped fuel a rally in the biggest cryptocurrency. But Standard Chartered is not bearish amid its changing view on prospects for an ether ETF. Digital assets have endured a perfect storm of negative headwinds in recent weeks, yet the worst is over and the market is well-positioned to recover, Standard Chartered said in a research report on Tuesday. “Bitcoin exchange-traded fund (ETF) inflows have stalled, and ether ETFs now look unlikely to be approved in May as expected,” analyst Geoff Kendrick wrote. The analyst had previously said that ether spot ETFs would likely gain approval on May 23, according to a March 18 report.

The “U.S. Securities and Exchange Commission (SEC) has targeted decentralized finance (DeFi) by suing Uniswap, U.S. Treasury yields have jumped, Federal Reserve rate cuts have been pushed back, and BTC and ETH – as risky assets – have been pulled lower by the escalation of the conflict in the Middle East,” Kendrick said.

Still, the bank says that the bad news is already priced in for bitcoin and ether, and “positive structural drivers” are expected to take over again. The company reiterated its end-of-year bitcoin price target of $150,000 and its ether forecast of $8,000. Bitcoin was trading around $66,800 and ether was near $3,237 at publication time. Market positioning is now much cleaner than before, as $261 million of leveraged long positions were removed from the bitcoin futures market on April 13 in response to Iran’s attack on Israel, the report noted. This was the largest daily liquidation since October 2023. Bitcoin spot ETF inflows have likely slowed due to macro reasons, the report said. These include higher U.S. Treasury yields and geopolitical tension in the Middle East.

Furthermore, the first wave of ETF buying may be largely complete, which means a strong positive driver of the market has stalled for now, the bank said. The next wave of buying will be the inclusion of these ETFs in wider macro funds, but this could take some time.

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