Ether and Altcoin Prices. The decision by regulators to hold off on Ether (for the time being) has, in the opinion of many analysts, increased the asset’s potential for growth. As of June 19, 2024, the SEC had concluded its investigation into the potential security classification of Ether (ETH $3,462) in the US. Laura Brookover, a lawyer with Consensys, predicted that there would be “no more protestations from the SEC that ETH is a security” in the cryptocurrency market.
“All the decision means is that at this time, the SEC will not be continuing its investigation,” explained Professor Carol Goforth, a University of Arkansas School of Law professor specializing in business associations and securities regulation. This decision has not been finalized. The SEC’s decision to end its investigation, according to Consensys, has removed Ethereum’s most significant threat to its survival.
Negative regulatory worries about ETH as a security have been settled thanks to the “momentous” SEC withdrawal. Which alternative coins could gain an advantage if Ethereum were freed from the SEC’s investigation?
Observers say Ether Price is Set to Surge
Since the SEC ended its inquiry, the price of Ether has remained relatively flat, continuing a horizontal pattern that began on May 23 with the announcement of the approval of the spot Ether ETF. Ether is down 2% as of this posting. As a result, some investors are starting to question whether the altcoin market could see a similar bubble as Ethereum. According to several market watchers, there is much room for future expansion.
Blockcircle partner and community lead Conor O’Neill said that removing “the major regulatory barrier” for Ethereum “sets a significant precedent for regulators worldwide.”
Ether and Altcoin Prices: An investor’s level of risk and uncertainty is significantly reduced due to the SEC’s decision to end the inquiry. The anticipated July 2 launch of spot Ether exchange-traded funds will impact the price of Ethereum (ETH). ETFs are expected to attract traditional investors like the U.S.-based spot Bitcoin BTC $63,414 ETFs did in January. This would lead to a rise in demand for Ethereum and an increase in its price.
That the ETH ETF “is highly likely to have a long-term positive impact on the price of Ethereum” was highlighted by O’Neill. We may witness a sell-the-news incident comparable to the one that occurred when the Bitcoin ETFs were authorized shortly. He predicted a temporary setback since investors will likely factor in some of this news when ETF trading begins.
While the crypto markets welcomed the SEC’s approval of Ether ETFs, Blockcircle’s partner pointed out that the clearance was conditional. Staking is not an option for exchange-traded funds that own Ether. As Goforth put it, “the SEC has alleged that staking itself involves an investment contract,” which means that token holders will no longer have the chance to earn additional rewards.
According to O’Neill, suppose the SEC continues to regulate digital assets while remaining completely opposed to staking strictly. In that case, it might harm ETH’s price and long-term performance as an institutional asset.
Some have also raised the question of whether, similar to the Bitcoin ETF, Grayscale outflows could impact the price of Ether following the launch of ETFs. After the debut of Ethereum ETFs, its $10 billion-valued Grayscale Ethereum Trust may start to experience significant withdrawals. This may have the same effect on the price of ETH as it did on Bitcoin. O’Neill elaborated that the new Bitcoin ETFs saw far more investment capital flowing into them than Grayscale due to the former’s higher management costs.
However, he pointed out that Grayscale’s Ether trust cost is now lower than other Ether ETF providers. Because of this, he thinks Grayscale’s holdings of Ethereum “are likely to increase exponentially with the launch of the ETF.” The company does not want to repeat the Bitcoin ETF launch.
When asked about the future of Ethereum, O’Neill said that it will “follow a similar trajectory to Bitcoin’s price, with a dip followed by an exponential rise.” One significant distinction between the Bitcoin ETF and the Ether ETF was the unexpected impact of acceptance. Now that one of the most fundamental arguments against Ether has been removed, its price has a clear route ahead.
Also Read: These Altcoins Drop by Double Digits After Binance Delistings
Altcoin Prices can Benefit Indirectly
Bitcoin price increases raise the whole crypto market. Similar things happen when Ether rises in altcoins. The SEC’s probe halt may affect other altcoins it has labeled securities.
Ether and Altcoin Prices: The SEC has filed lawsuits against Binance and Coinbase for securities law breaches. The SEC has classified cryptocurrencies such as Solana’s SOL $130, Cardano’s ADA $0.38, and Polygon’s MATIC $0.5682 as securities. The SEC’s departure might benefit DeFi projects, including Aave, Chainlink, Arbitrum, Optimism, and Base, according to O’Neill.
However, O’Neill noted that many offer staking and are still under SEC review. With Donald Trump supporting pro-crypto legislation, the SEC’s stance may shift significantly as the U.S. presidential election approaches. An uncertain future for SEC Chair Gary Gensler and the agency’s opposition to staking. There is speculation that cryptocurrency ETFs may be introduced. Recent spot Ether ETF approvals, more ETF issuers, and SEC investigation removal show a shift in SEC policy. These improvements are crucial for Ethereum and the cryptocurrency market.
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