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SEC Viewing Ethereum as a Commodity? Bloomberg Analyst Sees ETF Shift Happening

Last Updated December 19, 2023 2:45 PM
James Morales
Last Updated December 19, 2023 2:45 PM

Key Takeaways

  • SEC chairman Gary Gensler has often argued that all cryptocurrencies except Bitcoin are securities.
  • However, as Bloomberg analyst James Seyffart recently pointed out, the agency has increasingly treated Ethereum as a commodity.
  • Based on its acceptance of ETH futures, Seyffart anticipates the SEC approving spot Ethereum ETFs in 2024.

United States Securities and Exchange Commission (SEC) Chairman Gary Gensler has often asserted that all cryptocurrencies except Bitcoin are securities. But when the SEC accused Binance, Coinbase and Kraken of selling unregistered securities this year, one cryptocurrency – Ethereum – was conspicuously absent from the charges.

According to Bloomberg analyst James Seyffart, “the SEC has pretty much implicitly accepted Ethereum as a commodity”. From this, he concludes that if approved, spot Bitcoin Exchange Traded Funds (ETFs) could be followed by ETH-based ones.

ETH Futures Suggests SEC Acceptance of Commodity Status

When the CME Group applied for permission to launch the first Ethereum futures contracts in 2021, it claimed ETH was a commodity. Therefore, it was not subject to regulation by the SEC.

The SEC could have object then, if it wanted to argue that Ethereum was a security. By choosing not to do so, the SEC implicitly endorsed CME Group’s claim that Ether is a commodity.

Since then, the Commission has granted permission for ETFs to invest in ETH futures, further cementing the idea that Ethereum stands alongside Bitcoin as one of just 2 cryptocurrencies apparently considered commodities by the SEC.

Of course, the potential hypocrisy of the SEC granting Ethereum commodity status while simultaneously arguing that almost every other token is a security hasn’t been lost on XRP supporters. 

As long as the regulator distinguishes Ethereum and the majority of altcoins, it is likely that charges of double standards will continue to abound.

Spot Ethereum ETFs Incoming? 

Between the arrival of Bitcoin futures ETFs and the SEC’s approval of the first ETH futures funds, more than two years passed. Yet, with uncertainty still hanging over potential spot Bitcoin ETFs, asset managers are already lining up to launch equivalent Ethereum funds.

After Blackrock fired the starting gun on the race to launch spot Ethereum ETFs in November, it was soon joined by the likes of Ark Invest and VanEck.

With the SEC due to make decisions on those applications no later than mid-Summer, Seyffart said: “It’s likely to happen in 2024.”

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