SEC Halts Ethereum Investigation: Potential Price Surge and Impact on Altcoins Coming?
Summary:
The U.S Securities and Exchange Commission (SEC) has decided to end its investigation into Ethereum's (ETH) classification as a security. This decision has lifted significant regulatory pressure off Ethereum, potentially opening up room for growth. Despite the 2% dip in Ether's price since the conclusion of the SEC probe, market experts predict a surge, not only for Ether but also for the altcoin market. The impending launch of Ether exchange-traded funds (ETF) on July 2, however, might stir up short-term volatility. The drop in the SEC investigation could also indirectly benefit altcoins previously identified as securities, pointing to an evolving regulatory strategy as the crypto market continues to develop.
The U.S Securities and Exchange Commission (SEC) has brought its probe into whether Ethereum (ETH) should be labelled as a security to an end. This development, which took place on June 19, 2024, could grant Ether the necessary room to prosper, according to various market spectators. Though no further objections will be made by the SEC regarding the categorization of ETH as a security, the institution's decision to end the inquiry doesn't signify a conclusive determination, as emphasized by Carol Goforth, a professor from the University of Arkansas School of Law who specializes in business associations and securities regulation.
The SEC stepping back from scrutinizing Ethereum has removed a substantial hurdle that was jeopardizing the network's existence, as per Consensys, a standpoint endorsed by many. With the withdrawal, the uncertainty around ETH being a security has been cleared up, creating a brighter path for Ethereum price.
Ether price has remained fairly consistent, only slightly dipping by 2% since the investigation came to a halt. Some traders are anticipating a surge in ETH and a similar positive trend in the altcoin market. Blockcircle's community leader and partner, Conor O'Neill, shares this optimistic outlook due to the removal of the principal regulatory obstruction. However, he also acknowledges the potential volatility surrounding the launch of the spot Ether exchange-traded funds (ETF) on July 2, which could cause some short-term sell-offs.
Despite the approval of ETH ETF being a positive development for the crypto markets, restrictions have been placed by the SEC, such as the barring of offer Ether ETF with staking. Such regulations may negatively affect Ethereum's long-term performance and price.
Additionally, inquiries are surfacing about possible impacts on Ether price post-ETF launch due to Grayscale outflows, similar to what happened with the Bitcoin ETF. To counteract this, Grayscale has reduced their Ether trust fee, making it competitive with other Ether ETF providers.
When it comes to the impact on altcoin prices, history has shown that when Bitcoin or Ethereum prices surge, the rest of the crypto market typically follows suit. In light of the SEC discontinuing its investigation, altcoins previously identified as securities by SEC, such as Solana's (SOL), Cardano's (ADA) and Polygon's (MATIC), could also witness a boost.
The SEC's stance on scrutinizing projects offering staking capabilities could be changed drastically in the upcoming U.S presidential election, especially if Donald Trump, a pro-crypto advocate, prevails. A shift in the SEC's approach is being signaled, marking a defining moment for Ethereum and the wider cryptocurrency market.
Published At
6/21/2024 4:53:49 PM
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