In response to a latest Bernstein report, the approval of a spot Ethereum (ETH) exchange-traded fund (ETF) in the US may set a precedent for classifying Solana (SOL) as a commodity.

Classifying cryptocurrencies as securities or commodities has necessary implications. Whereas commodity classification makes it simpler to use and approve ETFs, securities classification topics property to extra stringent SEC oversight.

“Huge Three”

Approval of the Spot Ethereum ETF units an necessary precedent, which means the SEC considers the second-largest cryptocurrency to be a commodity. That is the primary time a digital asset apart from Bitcoin has obtained such a classification, elevating hopes that Solana will observe swimsuit.

Ether costs rose earlier this week after Bloomberg analysts raised the probabilities of SEC approval for the Spot Ether ETF from 25% to 75% following reviews that the regulator had requested updates to the filings. The SEC's remaining determination on these filings is due later right now, Could twenty third, after a number of delays.

Bernstein's report notes that the 75% rise in Bitcoin after the spot ETF approval means that Ethereum will see the same value motion after the spot ETF approval.

Nonetheless, if the SEC rejects the appliance, Ethereum may expertise vital volatility and sharp value corrections within the coming days, based on CryptoQuant analysis.

Crypto investor Brian Kelly expressed the same optimistic view about Solana and the potential of regulatory approval for an Ethereum ETF product in a latest interview with CNBC, speculating that SOL may very well be the following altcoin to obtain ETF approval, highlighting it as a possible candidate for funding managers to advertise.

Kelly highlighted Bitcoin, Ethereum, and Solana because the “massive three” digital property that would see ETF merchandise authorised this cycle. He pointed to the success of Bitcoin ETFs, which have amassed giant quantities of Bitcoin totaling roughly $58 billion, indicating sturdy demand for regulated crypto funding merchandise.

Nonetheless, Kelly acknowledged that there’s some skepticism inside the Solana neighborhood. He stated Solana's preliminary coin providing (ICO) and its classification as a safety by the SEC may pose challenges for ETF approval.

However, Kelly stays optimistic that regulatory and political modifications may improve the probability of approval for the Solana ETF as soon as the Ethereum ETF is authorised.

Modifications within the political state of affairs

The Bernstein report, launched forward of the SEC’s remaining determination on the ETH ETF utility, additionally highlighted the potential of a shift within the Biden administration’s stance on cryptocurrencies based mostly on latest developments.

Moreover, the report famous that if Trump is re-elected, his administration is more likely to additional assist the crypto trade by way of legislative and regulatory actions. In response to the report:

“If Trump is elected, cryptocurrencies may obtain vital assist from legislators and authorities companies, which may result in long-term structural modifications in crypto's monetary integration.”

The potential approval of the Solana ETF comes amid a altering regulatory atmosphere and rising bipartisan assist for cryptocurrencies. The Home of Representatives not too long ago handed the Monetary Innovation and Know-how Act of the twenty first Century (FIT21), which was handed with vital Democratic assist, signaling a attainable political shift.

Legal professional Jake Cherbinski stated the invoice's passage is a “vote of no confidence” within the SEC's present method to regulating cryptocurrencies, alluding to the political repercussions of sustaining an anti-crypto stance.

Regulatory approval of the Solana ETF marks a major milestone for the crypto trade and indicators mainstream acceptance and integration. Nonetheless, the trade stays cautiously optimistic in regards to the future because the Ether ETF continues to be awaiting approval.

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