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The cryptocurrency world continues to buzz with excitement around the spot Ethereum ETF. If spot Ethereum ETFs are approved, Bernstein released a report suggesting this could be very positive for Solana. According to the report, the approval of spot Ethereum ETFs in the US will be seen as significant regulatory relief for the cryptocurrency sector. This approval will increase expectations that Solana (SOL), a competitor to ETH, will also be categorized as a commodity.
High Expectations if Trump is Elected
In the Bernstein report, it was noted that the Biden administration might soften its stance on crypto before the November Presidential Elections, and a potential Trump victory would generally have a positive impact. Analysts Gautam Chhugani and Mahika Sapra stated:
“In the long term, if Trump is elected, we believe significant legislative and institutional support could initiate long-term structural changes in the financial integration of cryptocurrencies with a new SEC chairman”.
Analysts also noted that the approval of an Ethereum ETF would set a precedent for the first Blockchain asset other than Bitcoin to be accepted as a commodity, raising hopes that Ethereum’s peers like Solana would follow the same path. Classifying cryptocurrencies as securities or commodities will have broad implications. For example, ETF applications and approvals depend on tokens being classified as commodities. On the other hand, being classified as a security means stricter regulatory oversight by the SEC.
Ethereum Appears More Attractive Than Bitcoin
Bernstein notes that since the approval of spot Ethereum ETFs, Bitcoin has risen by 75%, and a similar price movement is expected for Ethereum. The report states that due to 38% of the cryptocurrency being locked in staking, smart contracts, and Layer-2 chains, and 66% of ETH supply not moving in the last twelve months, ETH’s free circulation and supply appear more attractive than Bitcoin’s.
Galaxy Digital (GLXY) research director Alex Thorn stated in a report released on Tuesday that the approval of spot Ethereum ETF 19b-4 applications is likely this week, but S-1 applications are not expected to take effect for weeks or months. Thorn emphasized that there would be no spot ETH products trading on the exchange until this summer.
If the SEC approves spot ETFs, Galaxy estimates they could be launched on exchanges in July or August. Galaxy also expects the regulator to approve all applications simultaneously to avoid giving any issuer an advantage.
