TradFi Institutions in Knots Over Crypto

by Beth Canova
By Beth Canova

Ethereum (ETH, “A-”) is experiencing an incredible surge in interest as the market eagerly anticipates a decision on the ETH spot ETFs this week. 

Consequently, all eyes are on the Securities and Exchange Commission and any accompanying commentary regarding ETH's approval.

Earlier this week, the SEC provided a promising indication by requesting aspiring ETF exchanges to refine their ETH ETF filings. 

This move is seen as a positive sign for approval ahead of crucial deadlines this week. Analysts interpreted the SEC's action as a positive development, significantly increasing the estimated chance of approval from 25% to 75%. 

As a result, investors have gained increased confidence, leading to the recent rally.

Now, theories abound regarding the significant shift in the SEC's stance over the past week, with some speculating a connection to the White House

My colleague Juan Villaverde did warn that the upcoming U.S. presidential election could influence the crypto market. And crypto lawyer Jake Chervinsky believes it to be the case here, as he expressed on social media …

Click here to see full-sized image.

 

Regardless of the true cause, the sudden surge in cryptocurrency buying has caused ETH's price to breakout after a two-month correction:

Click here to see full-sized image.

 

If the final decision this week is favorable, we can expect even higher prices, with ETH potentially reaching $4,000 or more.

And there is reason to be optimistic, despite many analysts’ previous stance that we’d likely see a rejection this round.

Yesterday, global investment manager VanEck’s spot ETH ETF — the very one that faces the SEC’s decision tomorrow — has been listed by the Depository Trust and Clearing Corporation under the ticker symbol “ETHV.”

Remember, a listing does not mean the ETF is available for purchase. The SEC will need to approve both application forms, as my colleague Marija Matić explained on Monday

That said, the SEC didn’t just become crypto’s best friend. Chair Gary Gensler recently made a statement against the Financial Innovation and Technology for the 21st Century Act — or FIT21 — which would in part determine which agencies have jurisdiction over which digital assets and provide regulatory clarity.

Gensler’s opposition boils down to the fact that the bill would mean that cryptos couldn’t be classified as securities, and thus no longer subject to SEC oversight.

And his position is backed by the White House, as well. The Biden Administration’s official statement is that, while it does not support FIT21, it is eager to work with Congress on a balanced framework for crypto regulation.

Supporters of the bill — including 60 crypto organizations such as Gemini, Kraken, Coinbase and the Digital Currency Group — contend that the securities laws that digital asset firms are currently being tied to were designed nearly 100 years ago, “without consideration of the technological advances of today, including the ability for transactions to move at the speed of the internet."

No matter the outcome of either the ETF approval or the House passing FIT21, one thing is very clear this week: Crypto has become too big for TradFi to ignore.

Adoption is only picking up steam. That’s why regulators and legislators are frantically trying to get ahead of this wave … or else they risk getting left behind.

But as a dedicated Weiss Crypto Daily reader, this likely isn’t coming as a surprise to you. 

You’ve heard us beat the crypto drum since we announced the start of this bull market.

And you know that the best is yet to come. 

Near term, expect increased volatility from whatever decision comes down from the SEC tomorrow. 

But long term, we expect to see the market surge to new heights as the year continues.

Hold on tight.

Best,

Beth Canova

About the Contributor

Beth Canova is a veteran of the publishing industry, specializing in cryptocurrency-related information and guidance. As the Managing Editor of some of the world’s most astute cryptocurrency experts — Juan Villaverde, Dr. Bruce Ng, Marija Matić and others — she's continually immersed, and well versed, on everything crypto.

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