- Ethereum’s resilience signals strong market confidence, with major non-exchange whales accumulating as crypto rebounds.
- SEC’s classification of Ether as a commodity, not a security, paves the way for Ethereum ETFs, marking a regulatory milestone.
- Upcoming decisions on Ether and Bitcoin ETFs by the SEC could majorly influence investment trends and establish new norms in cryptocurrency regulation.
Ethereum, a leading digital currency, is showing resilience as it approaches its resistance level of $2,444. As highlighted by Santiment, an analytics platform, development comes amidst a broader rebound in crypto prices. Interestingly, the largest Ethereum non-exchange whales are actively accumulating while their exchange counterparts maintain a low profile.
Bloomberg’s ETF analyst, James Seyffart, highlighted a pivotal development: the U.S. Securities and Exchange Commission’s (SEC) implicit recognition of Ether as a commodity. This acknowledgment came with the approval of Ether futures ETFs in the previous year. Consequently, the market is anticipating the introduction of a spot ETF variant for Ether in the near future.
During a recent CryptoQuant webinar, Seyffart discussed the SEC’s likely reasons for not contesting Ether’s classification. He pointed out that the first Ether futures ETFs in the U.S., launched on October 2 by several investment firms, faced no SEC objections in their classification. This development is crucial because it differentiates securities and commodities ETFs’ legal and regulatory frameworks.
Furthermore, Seyffart emphasized the potential legal implications for the SEC if it were to reclassify Ether as a security. Such a move would challenge the crypto industry and conflict with the Commodity Futures Trading Commission (CFTC), the SEC’s sister regulator. Hence, there is a strong expectation for the approval of Ethereum ETFs this year.
The SEC’s stance on Ether is further clarified by its recent loss in a court case involving the Spikes Index. This precedent underscores the importance of how financial instruments are registered.
The SEC faces a decision deadline in May 2024 for spot Ether ETFs proposed by VanEck, ARK 21Shares, and Hashdex. Before this, however, the SEC is expected to announce its decision on spot Bitcoin ETFs, with Seyffart predicting an approval and a significant influx of investments into Bitcoin ETFs within the next year.
