- The SEC may have unknowingly confirmed that Ethereum is a commodity
- This could pave the way for spot Ether ETFs very soon.
- Bitcoin ETF approval triggered an unexpected Ethereum rally, showing strong investor sentiment towards Ethereum.
- The pending Ether ETF applications by Grayscale and other major players further amplify the possibility of approval soon.
- With a potential spot ETF on the horizon, several analysts and AI models foresee Ethereum reaching $10,000 within the next five years.
- May 23rd, 2024, may be the closest deadline for an Ethereum ETF
A Bitcoin ETF has just been approved, after months of sitting on the SEC’s desk.
This means that some of the largest asset managers in the world now have the license to offer exchange-traded products (ETPs) in place of actual Bitcoin.
Investors with lower risk appetite now have a reason to jump on the Bitcoin train and bring in trillions of dollars of liquidity to the ecosystem.
Bitcoin will skyrocket in price from here, effortlessly trashing the altcoin market as investors rush in.
But then—where does that leave Ethereum?
Can an Ethereum ETF hit the market soon, and at least give Ethereum a chance against Bitcoin?
Let’s find out.
Ether as a commodity
Perhaps one of the most visual battles the SEC has been fighting against the crypto industry is the issue of commodities versus securities.
This has been the basis for some of the harshest lawsuits in the last ten years, like the harrowing three-year battle between the SEC and Ripple Labs from 2020 – 2023.
When it comes to ETFs, the legal status of a cryptocurrency is one of the major obstacles to scale.
Is this cryptocurrency a commodity or a security?
The answer to this question then determines how any ETF filings are treated by the SEC.
This is so because the SEC approved some of the first Ethereum ETFs in October 2023. And according to James Seyffart, an ETF analyst at Bloomberg, this implicitly means that by approving those Ethereum futures ETFs, they’re implicitly accepting those Ethereum futures as commodities.
Seyffart also says that when the CFTC classified Ethereum as a commodity in its lawsuit against FTX in December 2022, the SEC did not object.
This means that, if the SEC were to reverse course and classify ether as a security, it would be forced to delist all of the futures ETFs it approved and deal with massive lawsuits from investors and issuers.
In essence, the SEC is arm-locked at this point, and cannot call Ethereum a security anymore.
Spot Ethereum ETFs On The Horizon
This week, the SEC approved the first-ever spot Bitcoin ETF from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex and Franklin Templeton.
However, the exact opposite of investor expectations happened.
Instead of an immediate rally on Bitcoin, Ethereum and several other L2 cryptocurrencies took off, with Ethereum, Arbitrum and Avalanche rallying by 10%, 17% and 12%.
This shows strong investor sentiment towards Ethereum, and the chances of a spot Ethereum ETF approval soon.
In October 2023, Grayscale Investments submitted a Form 19b-4 to become a spot ETF by converting its Grayscale Ethereum Trust. This Ethereum trust has about $5 billion in assets under management—or 2.5% of all ETH in circulation, and is presently the biggest ETH investment vehicle globally.
At the time, the president of the ETFStore, Nate Geraci opined that this could be the beginning of a new Ether ETF filing.
Others like VanEck, Ark Invest, 21 Shares, and Hashdex, among others also have pending Ethereum ETF filings, and analyst, Will Clemente has said that we may see a new Ethereum ETF from Van Eck as early as May 23rd 2024.
Ethereum To $10,000?
Several predictions from analysts and AI prediction models put Ethereum at $10,000 between now and the next five years.
Changelly, for example, puts Ethereum at a price of around $9,854 per coin as early as 2027.
Coincodex also puts Ethereum at a yearly high of around $10,971 in 2029. Late last year, analyst, ALtcoin Daily also opined that Ethereum could “easily hit” $10,000 very soon.
Overall, with the introduction of a new Ethereum ETF, Ethereum’s price is expected to explode upwards, turning these predictions into reality in less than five years.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.