Solana
Approval of Spot Ether (ETH) ETF would raise expectations that Solana (SOL) could also be classified as a commodity: Bernstein
Approval of a one-time ether (ETH) Exchange-traded funds (ETFs) in the United States will be seen as a significant regulatory relief for the crypto sector and will raise expectations that ETH rival SOL will be classified as a commodity , broker Bernstein said in a research report on Tuesday.
The report sent to clients days before the SEC’s latest deadlines on whether to approve some of the ETH ETF applications indicated that the Biden administration may soften its stance on crypto ahead of the November presidential elections and that a Trump’s potential victory would be largely positive.
“In the long term, we believe that if Trump were elected, crypto could benefit from significant legislative and institutional support (with a new SEC Chairman), to usher in lasting structural changes in crypto financial integration” , wrote analysts Gautam Chhugani and Mahika Sapra. .
“More tactically, approval of the Ethereum ETF would set a precedent for a first non-Bitcoin blockchain asset to be considered a commodity, raising hopes that Ethereum’s peers (Solana likely) will follow the same path,” added the analysts.
Classifying cryptocurrencies as securities or commodities has far-reaching implications. For example, ETF applications and approval depend on whether the tokens are classified as commodities. Meanwhile, categorization as a security means stricter regulatory oversight from the SEC.
Ether jumped earlier in the week after two well-followed Bloomberg ETF analysts boosted the SEC’s odds. approving spot ether ETFS at 75% against 25% and after reports that the regulator had abruptly asked candidates to update their records, signaling that approval was more likely. The SEC has several final deadlines for ether spot ETF applications this week, after delaying its decisions several times.
Bernstein notes that bitcoin is up 75% since spot ETFs were approved and expects similar price action for ether. The free float and supply of Ether seems more attractive than that of Bitcoin, since 38% of the cryptocurrency is locked in staking, smart contacts and layer 2 chainsand 66% of the ETH supply has not changed over the past twelve months, the report notes.
While Ether ETF 19b-4 spot deposits are expected to be approved this week, the S-1 filings are not expected to take effect for weeks or even months, “which will result in no tradable ETH spot vehicles on the stock market before this summer,” wrote Alex Thorn. , head of research at Galaxy Digital (GLXY) in a report released Tuesday.
If the SEC approves spot ETFs, Galaxy speculates they could go public in July or August. Galaxy also expects the regulator to approve all applications simultaneously to avoid giving any individual issuer a head start.