Bloomberg Intelligence exchange-traded fund (ETF) analyst, James Seyffartbelieves that political considerations played a significant role in the surprise approval by the U.S. Securities and Exchange Commission (SEC) of the ETFs of Ethereum (CRYPTO:ETH) in the middle of this year.
What happened
In an interview with “BitLab Academy,” Seyffart pointed out several factors that likely influenced the SEC’s decision, including the pro-Bitcoin stance of Donald Trumpbipartisan support for pro-Cryptocurrency legislation, and the growing recognition of cryptocurrency advocates as an important voting bloc.
“The political process was 100% involved,” Seyffart said in a recent interview. “How much is up for debate, but it was definitely political in some respect.”
The analyst suggested that the SEC may have realized that denying approval of Ethereum ETFs would lead to it losing in court, similar to its defeat with Ethereum ETFs. Bitcoin (CRYPTO:BTC). However, he noted that the lack of typical approval signals made the unexpected approval unexpected.
“There was a silence… and suddenly, the whole scene changed,” Seyffart said.
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Why is it important?
Seyffart sees potential for other cryptocurrency ETF products, including a Bitcoin market-cap-weighted index fund and an Ethereum one. However, he believes that the approval of other tokens such as Solarium (CRYPTO:SOL) faces significant near-term hurdles.
“If we follow precedent, it won’t happen anytime soon,” he said of the possibility of a Solana ETF. “I think that precedent will change over time, it’s just a matter of time.”
Seyffart stressed that the cryptocurrency industry’s growing political clout could speed up regulatory changes, especially if the White House changes hands in November. However, he cautioned that significant changes would still take time due to the complexity of appointing new agency leaders and passing legislation.
What’s coming
Ethereum’s influence as an institutional asset class will be explored in depth at Benzinga’s upcoming Future of Digital Assets event on November 19.
Image: Shutterstock
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