The approval of a spot Ether (ETH) exchange-traded fund (ETF) in the U.S. is poised to be a landmark moment for the cryptocurrency sector. According to a research report by broker Bernstein released on Tuesday, this move would signal significant regulatory relief and might pave the way for other cryptocurrencies like Solana (SOL) to be categorized as commodities.
Regulatory Shifts and Political Influences
As the final deadlines for the SEC's decisions on various ETH ETF applications approach, there's speculation about potential shifts in the U.S. administration's stance on crypto. The Bernstein report suggests that the Biden administration could adopt a more lenient position on cryptocurrencies ahead of the November Presidential Elections. Furthermore, a potential Trump victory might bring substantial legislative and agency support for the crypto sector, including the appointment of a new SEC chair favoring long-term structural changes in crypto financial integration.
Implications of ETF Approval
The approval of an Ethereum ETF would set a crucial precedent, recognizing a non-Bitcoin blockchain asset as a commodity. This could raise hopes for Ethereum's competitors, such as Solana, to receive similar classification. The distinction between securities and commodities has extensive regulatory implications. Commodities like Bitcoin and potentially Ethereum, if recognized as such, would face different regulatory frameworks compared to securities, which are subject to stricter oversight by the SEC.
Market Reactions and Predictions
Earlier this week, Ether's price saw a significant boost after two Bloomberg ETF analysts increased the likelihood of the SEC approving spot Ether ETFs to 75% from a previous 25%. This optimism was fueled by reports that the SEC had requested applicants to update their filings, indicating a higher chance of approval. Bernstein's analysis draws parallels with Bitcoin's market performance, noting a 75% rally following the approval of Bitcoin spot ETFs. They predict a similar positive reaction for Ether, highlighting its attractive supply dynamics, with a substantial portion locked in staking, smart contracts, and layer 2 chains.
Timeline for ETF Launch
While the 19b-4 filings for Ether spot ETFs are expected to be approved imminently, the S-1 filings might take several weeks to months to become effective. This delay means that exchange-tradable ETH spot vehicles are unlikely to appear before summer. Alex Thorn, head of research at Galaxy Digital, speculates that if the SEC grants approval, these ETFs could launch on exchanges by July or August. Galaxy also anticipates the SEC will approve all applications simultaneously to ensure a level playing field for all issuers.
.png)
If you have any doubts, Please let me know