The leading cryptocurrency Bitcoin’s (BTC) recent price rally has reportedly left the decentralized blockchain Ethereum’s native Ether (ETH) token lagging behind. Owing to the Securities and Exchange Commission’s (SEC) categorization of digital assets including Ether as unregistered securities, coupled with regulatory uncertainty in the United States, experts opined that BTC’s commodity status allowed it to outperform Ether.
As per the SEC, a total of 19 coins have qualified as unregistered securities in the Binance Holdings Ltd. and Coinbase Global Inc. crypto exchanges lawsuits. The legal proceedings have been reported to have plummeted the prices of some of those tokens by over 20% since June 5.
While the second-largest crypto coin Ether’s price has remained stagnant during the period in question, that of Bitcoin has soared over 14%. Investors’ preference for Bitcoin seemingly stems from the regulatory risk surrounding Ether. The inflow of funds emanated from the leading investment fund manager BlackRock’s BTC exchange-traded funds (ETF) boosting fresh demand sources.
Regardless, Ether is still up over 60% in 2023. At press time, Ether is trading at $1,899.45, while BTC is priced at $30,451.62, as per CoinMarketCap. David Lawant, digital-asset trading platform FalconX’s head of research, asserted that the rationale used by the SEC in its lawsuits is unknown, adding that the exclusion of Ether from the lawsuit doesn’t mean that the cryptocurrency is not a security.
Lawant further added:,
The SEC does not necessarily need to name every crypto asset they deem a security to make their case in these proceedings, so they don’t benefit from getting into the murkier discussion about whether ETH is a security in this context.
Notably, the SEC is reported to have subtly signaled that Ether’s fresh proof-of-stake (PoS) model could potentially classify it as a security. This hint stemmed from the securities regulator following a suggestion from it that the “US had jurisdiction over the blockchain.”
