- Insiders revealed that the Biden administration is advocating for the approval of the spot Ethereum ETF to gain favor leading up to the 2024 Presidential Elections.
- Bitcoin maxis are having strong meltdown over SEC’s 18-degree turn on spot Ethereum ETF.
- Coinbase CLO says that the current bill challenges SEC’s flawed Howey Test.
Discover the political and financial implications of the potential approval of a spot Ethereum ETF by the SEC, and how it could impact the 2024 Presidential Elections.
Spot Ethereum ETF at the Center of U.S. Politics
In recent days, Ethereum (ETH) and the wider cryptocurrency markets have surged amid anticipation of the spot Ethereum ETF gaining approval this week. The Ethereum price skyrocketed above $3,800, marking over 30% gains in just the last two days. However, questions arise regarding the US SEC’s swift handling of the 19b-4 filings. Speculation suggests that the decision to expedite the spot Ethereum ETF approval process may have more political motives than regulatory considerations.
Political Motivations Behind the Approval
Until last week, the US SEC was not willing to engage with the issuers on the spot Ethereum ETF, however, it has suddenly taken a 180-degree turn this week.
“It is a completely unprecedented situation, which means it’s entirely political. They’re not even internally coordinated yet, which is why this is most likely a political decision,” noted Sarah Wynn from The Block.
Other sources also stated that with the U.S. Presidential elections approaching later this year, this could be politically motivated as well. The Biden administration has built its reputation for cracking down on the crypto market. On the other hand, former President Donald Trump has undertaken a pro-crypto stand and is willing to accept donations in crypto. “The problem is that the Democrats urgently need young voters to turn out for them. Biden’s campaign strategy is focused on presenting himself as a forward-looking octogenarian,” the source stated. The source added that President Joe Biden could gain an advantage if the SEC approves spot Ether ETFs.
Expert’s Take on the Matter
Some of the crypto industry experts believe that the SEC’s 180-degree shift this week isn’t entirely politically motivated. Nate Geraci, the President of ETF Store, said that the SEC was always preparing for the approval of spot Ethereum ETF. The securities regulator approved Ether futures ETF last October 2023, from ProShares, VanEck and Bitwise, thereby setting the stage for spot products.
“Once the SEC approved ether futures ETFs, that likely sealed the fate of an approval outcome for spot ether ETFs,” Geraci said.
On the other hand, some Bitcoin maximalists have been having a real meltdown on the SEC considering a spot Ethereum ETF approval. Popular Twitter handle, The Bitcoin Therapist noted: “If the SEC approves an Ethereum ETF it will be an indication the market is not regulated by competent actors. Ethereum is literally a speculative platform for gambling on centralized shitcoins. This will pave the way for a shitcoin casino embedded into the SEC.”
Paul Grewal, Chief Legal Officer at Coinbase, asserts that the current bill challenges the SEC’s recent assertion that all cryptocurrencies, except Bitcoin, meet the Howey Test criteria for securities. Grewal emphasized that this bill does not dismantle the industry but rather addresses what he considers a flawed regulatory perspective.
Note that there’s no clear timeline for the approval of spot Ether ETFs. However, the current developments suggest that they could be arriving by late July or early August.
Conclusion
The potential approval of a spot Ethereum ETF by the SEC is a significant development with far-reaching implications. While the political motivations behind the decision are evident, the financial impact on the cryptocurrency market and the broader economy cannot be understated. As the 2024 Presidential Elections approach, the approval could serve as a strategic move to garner support from younger, tech-savvy voters. Regardless of the underlying motivations, this development marks a pivotal moment in the intersection of politics and cryptocurrency regulation.
