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Ethereum Regulatory Clarity Is Far More Important Than Spot ETH ETFs: Here’s Why

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Ethereum price is rallying, one analyst thinks regulatory clarity for ETH is more important than spot ETH ETF approval - here's why.

Ethereum price is rallying; one analyst thinks regulatory clarity for ETH is more important than spot ETH ETF approval – here’s why.

This week has been huge for crypto, but especially Ethereum.

It is rare for the United States Securities and Exchange Commission (SEC) to appear to make “rushed” decisions. Doing a 180-turn on a position is also extremely rare.

Therefore, it was a relief for crypto supporters when discussions around the issuance of spot Ethereum ETFs were accelerated this week, culminating in approving all listings.

ETH and Bitcoin prices shot higher before retracing to spot rates.

However, what’s evident is that the United States regulators and the Biden administration appear to appreciate the underlying technology and products and what they mean to “young” voters.

This switch, giving ETH the much-needed regulatory clarity, powered sentiment to new levels, even overshadowing concerns about a potential retail investor frenzy as seen when spot Bitcoin ETFs went live in January.  

(ETHUSDT)

Earlier on, market observers initially worried that a spot Bitcoin ETF approval could trigger a wave of “Degen” (highly speculative) retail investment into BTC. That was not the case. If anything, the leg up has been institutional-driven. 

The same could be seen once spot Ethereum ETF shares begin trading in the coming weeks.

DISCOVER: How to Buy Ethereum in May 2024 – Beginners Guide

Ethereum (and Proof-of-Stake Platforms) Finds Regulatory Relief

Jim Bianco, a macro researcher, now believes the “degen” trading (or aping in) concern might be unfounded. 

In a post on X, Bianco highlights Ethereum’s unique features and ecosystem characteristics that will attract different types of investors compared to BTC, a HODL coin useful for hedging against rising inflation.  

He notes that the clarity of proof-of-stake following the spot Ethereum ETF listing approval might spark even more interest in Ethereum and the circulating ETH. 

Additionally, the researcher observes that the voting of FIT21 and SAB 121 in recent days was critical, helping foster innovation. 

After the SAB 121 vote, public companies under the United States SEC are now free to custody coins. 

In turn, this helps provide clarity for proof-of-stake projects like ETH. 

Bianco also said that the resignation of Martin Gruenberg from the Federal Deposit Insurance Corporation (FDIC) is huge for the industry. Gruenberg was a crypto critic. 

The sudden change of tune from the United States SEC could also signal the end of the so-called “Operation Chokepoint 2.0.” Analysts said the goal of this operation was to stifle innovation in the sphere, which would have capped the expansion of crypto solutions, especially those from Ethereum. 

The Bottom Line: Will Wall Street Flock To ETH?

The macro researcher now thinks recent pro-crypto regulations in the United States, especially on Ethereum, are more significant than the approval of spot ETH ETFs.

Notably, the newfound clarity on Ethereum would power the growth of proof-of-stake ecosystems, indirectly helping lift other protocols, including Solana.  

This clarification will allow Wall Street to flow to Ethereum. Unlike Bitcoin, Ethereum offers a rich tapestry of financial services, including tokenization, insurance, borrowing, and more.

The breadth of offerings allows Wall Street players to explore more opportunities, not just HODL, possibly even supporting prices.

EXPLORE: Spot Ethereum ETFs Listing Approval Sends A $380M Shockwave Through Market

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Dalmas is an experienced journalist with over a decade in crypto, technology, and blockchain. His work and that of his partners have been featured in top news outlets, including Forbes, investing.com, and Entrepreneur, among others. He is passionate about crypto and is always on the lookout for the latest trends in these fields. Connect with Dalmas on X @Dalmas_Ngetich

View all Posts by Dalmas Ngetich

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