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The approval of the Ethereum ETF will set the stage for the Solana ETF, commodity classification
According to a recent Bernstein report, the approval of a commercial Ethereum (ETH) Exchange Traded Fund (ETF) in the United States could set a precedent for classification Solana (SOL) as a commodity.
The classification of cryptocurrencies as securities or commodities has significant implications. Commodity classification facilitates ETF applications and approvals, while securities classification subjects assets to more rigorous oversight by the SEC.
“The Big Three”
The approval of Ethereum spot ETFs would mean the SEC treats the second-largest cryptocurrency as a commodity, setting a critical precedent. This would mark the first time a non-Bitcoin digital asset has received such a classification, raising expectations that Solana will follow suit.
The price of Ether surged earlier this week after Bloomberg analysts raised the probability of SEC approval for spot Ether ETFs to 75% from 25%, following reports that the regulator had requested updates to the documents filed. The SEC’s final decisions on these applications are expected later today, May 23, after numerous delays.
Bernstein’s report noted this That of Bitcoin Rally of 75% after the approval of Spot ETFs suggests similar price action for Ethereum following the approval of spot ETFs.
However, if the SEC rejects the requests, Ethereum could experience significant volatility and a sharp price correction in the coming days, according to CryptoQuant research.
Cryptocurrency investor Brian Kelly expressed similar optimistic views on Solana and the potential regulatory approval of Ethereum ETF products during a recent interview on CNBC. He speculated that SOL could be the next altcoin to receive ETF approval, highlighting it as a likely candidate for investment managers to pursue.
Kelly highlighted that Bitcoin, Ethereum and Solana are the “big three” digital assets that could see ETF products approved this cycle. She highlighted the success of Bitcoin ETFs, which collectively have accumulated a significant amount of Bitcoin, valued at around $58 billion, indicating strong demand for regulated crypto investment products.
However, Kelly also acknowledged some skepticism within the Solana community. You said Solana’s initial coin offering (ICO) and its classification as a security by the SEC could pose challenges to the ETF’s approval.
Despite this, Kelly remained optimistic that the changing regulatory and political landscape could increase the Solana ETF’s chances of approval if Ethereum ETFs receive the green light.
Changing political landscape
The Bernstein report, released ahead of the SEC’s final decisions on ETH ETF applications, also highlighted a potential shift in the Biden administration’s stance on cryptocurrencies based on recent developments.
Furthermore, the report notes that if Trump is re-elected, his administration is likely to further support the cryptocurrency industry through legislative and regulatory measures. According to the report:
“If Trump is elected, cryptocurrencies could enjoy significant legislative and agency support, leading to long-lasting structural changes in cryptocurrency financial integration.”
The potential approval of Solana ETFs comes amid an evolving and growing regulatory environment bipartisan support for cryptocurrency. The recent passage of Financial innovation and technology for the 21st century (FIT21) The House action, with significant Democratic support, signals potential policy change.
Attorney Jake Chervinsky described the bill’s passage as a “vote of no confidence” in the SEC’s current approach to regulating cryptocurrencies, suggesting political consequences for maintaining an anti-crypto stance.
Regulatory approval of the Solana ETFs would mark a significant milestone for the cryptocurrency industry, signaling mainstream acceptance and integration. However, with Ether ETFs still awaiting approval, the industry remains cautiously optimistic about the future.