- The Biden administration is pushing for a spot Ethereum ETF to gain favor with young voters ahead of the 2024 Presidential elections, causing a significant rally in Ethereum prices.
- While some view the SEC’s sudden interest as politically motivated, others believe it aligns with previous regulatory groundwork, despite strong opposition from Bitcoin maximalists.
With the 2024 U.S. Presidential elections looming, the Biden administration is making strategic moves to sway voter sentiment, one of which involves the potential approval of a spot Ethereum ETF. Sources familiar with the matter suggest this push is aimed at garnering favor among young, tech-savvy voters. The broader cryptocurrency market, particularly Ethereum (ETH), has seen a significant rally, with ETH prices surpassing $3,800 and registering over 30% gains in just the past two days, driven by hopes of the ETF’s approval.
A Political Maneuver or Regulatory Shift?
The SEC’s recent pivot on the spot Ethereum ETF has raised eyebrows. Up until last week, the agency showed little interest in engaging with issuers on this matter. The sudden change in stance has been interpreted by many as politically driven rather than a regulatory evolution. Sarah Wynn from The Block describes the situation as “unprecedented,” suggesting that the lack of internal coordination indicates a political motive behind the SEC’s rush.
Adding to the speculation, the Biden administration’s crackdown on the crypto market contrasts sharply with former President Donald Trump’s pro-crypto stance. Trump has openly accepted crypto donations, positioning himself favorably among cryptocurrency enthusiasts. As the Democratic Party seeks to attract young voters, President Biden’s campaign strategy appears to focus on presenting him as a forward-thinking leader, despite his age. Approving a spot Ether ETF could bolster this image, providing a competitive edge over his rivals.
EVERYTHING HAS CHANGED.
— The Wolf Of All Streets (@scottmelker) May 21, 2024
Democrats pushed back against Biden and Warren and voted for crypto.
The FDIC chair that Warren was privately protecting and who orchestrated Chokepoint 2.0 is stepping down.
The ETH ETFs are likely to be approved now as a result of the tide change.…
While some industry insiders believe the SEC’s sudden 180-degree turn is entirely political, others, like Nate Geraci, President of ETF Store, argue otherwise. Geraci points out that the SEC’s approval of Ether futures ETFs last October set a precedent for spot products, indicating that the current developments might be a continuation of previous regulatory groundwork rather than a new, politically charged agenda.
My theory on SEC waiting until last minute to engage w/ exchanges & issuers on spot eth ETFs…
— Nate Geraci (@NateGeraci) May 21, 2024
I think politics played a very minor role here, if any.
via @ForTheWynn_ pic.twitter.com/IOZQOJPNBA
However, not everyone is on board with this shift. Bitcoin maximalists have expressed significant discontent, viewing the potential approval of an Ethereum ETF as a sign of regulatory incompetence. They argue that Ethereum’s platform, which supports numerous decentralized applications and tokens, introduces speculative risks that could undermine market integrity. The popular Twitter handle, The Bitcoin Therapist, voiced concerns about a “shitcoin casino” emerging under the SEC’s watch if the Ethereum ETF is approved.
Paul Grewal, Chief Legal Officer at Coinbase, adds another layer to the debate by challenging the SEC’s application of the Howey Test. Grewal argues that the current bill aims to rectify what he sees as flawed regulatory perspectives, rather than dismantling the cryptocurrency industry.
The exact timeline for the approval of spot Ether ETFs remains uncertain. However, current indicators suggest that an announcement could come as early as late July or early August. As the political and regulatory landscape evolves, the implications of this move will undoubtedly continue to reverberate across both the cryptocurrency market and the broader political arena.
