Regulators have decided to step back from Ether (for now), a move that many observers believe could create space for the asset to flourish.
On June 19, 2024, the United States Securities and Exchange Commission (SEC) officially concluded its inquiry into whether Ether (ETH) should be classified as a security. Consensys lawyer Laura Brookover stated that the crypto markets will no longer hear objections from the SEC regarding ETH’s security status.
However, Carol Goforth, a professor at the University of Arkansas School of Law specializing in business associations and securities regulation, explained to Cointelegraph that the SEC’s decision simply means that, at present, they will not be continuing with their investigation. It does not represent a final ruling.
Consensys views the SEC’s withdrawal from the Ethereum investigation as a significant relief that had previously posed a threat to the network’s viability.
The SEC’s “historic” retreat has dispelled concerns over ETH’s security status, but how will the price of Ether respond to this newfound clarity? The SEC’s investigation had also impacted other cryptocurrencies with similar characteristics to Ether, so which alternative coins could benefit from Ethereum’s liberation?
Observers anticipate a surge in Ether price. Since the SEC ceased its investigation, Ether’s price has remained relatively stable, following a horizontal pattern that began after the news of the approval of spot Ether ETF on May 23.
At the time of publication, Ether is down by 2%, prompting speculation among traders about a potential surge in ETH’s price and its impact on the altcoin market.
Conor O’Neill, community lead and partner of investment analytics company Blockcircle, believes that the removal of the major regulatory hurdle for Ethereum sets a significant precedent for global regulators. He predicts a surge in the price of Ethereum.
The imminent launch of spot Ether exchange-traded funds on July 2 is expected to have a significant impact on ETH’s price. Traditional markets are likely to inject capital into these ETFs, leading to increased demand for ETH and a subsequent price boost.
Despite the positive news surrounding the ETH ETF approval, concerns have been raised about the SEC’s conditions for approving Ether ETFs. O’Neill highlighted that the SEC’s opposition to staking could potentially hinder ETH’s long-term performance as an institutional asset and, consequently, negatively affect its price.
The potential impact of Grayscale outflows on the price of Ether after the ETFs launch has also been a topic of discussion. O’Neill suggested that the Grayscale Ethereum Trust, with a valuation exceeding $10 billion, could experience significant outflows post ETF launch, affecting ETH’s price similar to what happened with Bitcoin.
In conclusion, the future trajectory of ETH’s price appears promising, with various factors influencing its performance. The removal of regulatory barriers and the launch of ETH ETFs signal a potentially transformative phase for Ethereum and the broader cryptocurrency market.