Ethereum Spot ETF Half Approved, Could be Regarded as “Commodity”
The Securities and Exchange Commission (SEC) officially approved Form 19b-4 (Exchange Rule Change) on May 24, including eight Ethereum spot ETFs from BlackRock, Fidelity, and Grayscale. According to a report from Wall Street investment bank Bernstein, the approval of Ethereum spot ETFs in the United States will demonstrate a relatively relaxed regulatory environment for the cryptocurrency industry, thereby increasing the chances of classifying “Solana” as a “commodity”.
Cryptocurrencies are classified as either securities or commodities, each with different implications. If a cryptocurrency is classified as a commodity, the process of applying for and obtaining ETF approval is relatively easier because commodities are regulated by the Commodity Futures Trading Commission (CFTC), which generally has more lenient regulatory requirements than the SEC. If classified as a security, strict SEC regulatory rules must be followed, including more detailed information reporting requirements and more comprehensive compliance plans.
The approval of Ethereum spot ETFs by the SEC most likely means that the SEC will view Ethereum as a commodity rather than a security, a determination that may affect other digital assets, including Solana.
Further reading:
Second major milestone in the cryptocurrency industry this year: SEC “half approves” Ethereum spot ETF, what does it mean?
In a changing regulatory environment in the United States, is a Solana ETF possible?
Brian Kelly, CEO of digital asset investment company BKCM, speculated in a recent interview with CNBC that Solana could become the next altcoin (referring to all cryptocurrencies other than Bitcoin) to receive ETF approval.
Kelly emphasized that Bitcoin, Ethereum, and Solana are the “big three” digital assets, and we may see related ETF products approved in this cycle. He pointed out that Bitcoin ETFs have already attracted many investors into the market, with a total market value of approximately $58 billion held by these ETFs, indicating strong demand for this type of ETF among the public.
Although Solana has been heavily referred to as a “security” by the SEC, CryptoSlate points out that regulatory and political environments can change at any time, increasing the chances of Solana ETF approval, especially after Ethereum ETFs are also approved.
In a letter on May 22, bipartisan groups in the United States recommended that the SEC approve Ethereum spot ETFs, seemingly indicating a gradual softening of the government’s attitude towards cryptocurrencies, which could also be a key factor in the birth of a Solana ETF in the future.
In addition, the U.S. House of Representatives recently passed the Financial Innovation and Technology Act of the 21st Century (FIT21), which provides a clear framework for the classification of digital assets and clearly distinguishes between commodities and securities, identifying which digital assets are regulated by the CFTC and which are regulated by the SEC, reducing regulatory uncertainty and promoting innovation and development.
However, the FIT21 bill has only passed the House of Representatives vote for now and will take some time to be reviewed by the Senate. During the process, there will be many amendments and adjustments, and there is also opposition. It is still uncertain how it will ultimately turn out.
The approval of Ethereum spot ETFs now brings an optimistic atmosphere to the entire cryptocurrency industry. If a Solana ETF is submitted and approved in the future, it may signify the formal entry of cryptocurrencies into the mainstream market and represent a more proactive support from the government and regulatory agencies for financial innovations related to cryptocurrencies.