Today in the cryptocurrency market, significant developments have been observed, particularly with Standard Chartered upgrading its Ethereum price forecast to $7,500. This upgrade is attributed to increased institutional buying and the growth of stablecoins, following recent changes in US regulations. The British bank’s new target surpasses its earlier forecast of $4,000, indicating a substantial shift in the market’s potential.
Ether Reaches New Heights as Standard Chartered Ups Goal to $7,500
Standard Chartered’s decision to increase its Ethereum price forecast is based on several key factors. Firstly, there has been a notable increase in institutional investment in Ether, with exchange-traded funds (ETFs) and other institutional investors acquiring 3.8% of the total ETH in circulation since June. This surge is comparable to the rapid accumulation of Bitcoin by similar entities during the 2024 US election cycle.
The bank also highlighted the commitment of the Ethereum Foundation and Etherealize, organizations behind the Ethereum ecosystem, as a positive sign. Furthermore, plans by Vitalik Buterin to enhance the Layer 1 throughput of Ethereum by ten times are expected to facilitate more high-quality transactions, potentially solving smaller transfer issues in Layer-2 networks like Arbitrum and Base.
Source: Standard Chartered
The adoption of the Genius Act in July is cited as another main catalyst for the increased forecast. This legislation provides a clear framework for stablecoins, paving the way for their mainstream adoption. Notably, stablecoins account for 40% of all blockchain fees, with more than half being on the Ethereum network.
US Bank Groups Seek to Close StableCoin Return “Loophole” in Genius Act
US bank groups, led by the Bank Policy Institute (BPI), have appealed to Congress to address a loophole in the Genius Act that could allow stablecoin issuers to indirectly offer returns on stablecoins through affiliated companies. The current law prohibits stablecoin issuers and token owners from offering such returns but does not explicitly prevent crypto exchanges or connected companies from doing so.
This loophole could enable issuers to bypass the law by offering returns through these partners, potentially disrupting the flow of loans to US companies and families and possibly triggering a $6.6 trillion shift from the traditional banking system into stablecoins.
A diagram showing how the money supply can “reinstate” into stablecoins according to the Genius Act. Source: US finance department
The banking groups are concerned that offering returns on stablecoins could undermine banks’ ability to attract deposits with high-interest savings products, necessary for supporting the loans they provide. The offer of returns is one of the largest marketing incentives that stablecoin issuers have to attract users, with some stablecoins like USDC offering rewards to those who hold them on crypto exchanges.
Kwon Pleads Guilty to Two Charges Related to Terraform Labs
Do Kwon, the co-founder of Terraform Labs, has changed his plea from not guilty to guilty on two of the nine charges he faced from the US government. According to reports from the US District Court in the Southern District of New York (SDNY), Kwon’s agreement with prosecutors includes a financial penalty of $19 million.
The two charges Kwon pleaded guilty to could carry a 25-year prison sentence if served consecutively, but the agreement recommends no more than 12 years. Kwon was initially charged in March 2023 with securities fraud, market manipulation, money laundering, and wire fraud related to his role in Terraform Labs.
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