The newly opened door to ether ETFs is part of a larger story that dominated cryptocurrency markets last week: the industry's political tides appear to be shifting in its favor. Thursday night's approval by the Securities and Exchange Commission of a rule change that would pave the way for the creation of ether ETFs caught most market watchers off guard. Expectations of an approval were low as the week began, but flipped completely and suddenly last Monday sending ether up 20% . The SEC decision followed a vote in the House of Representatives on May 8 to overturn a controversial SEC accounting policy, known as SAB 121, that forces banks to treat digital assets on their books as liabilities. The White House said the same day that President Biden would veto the bill and, in any case, the Senate rejected the proposal on May 16. Meanwhile, on May 9, former President Donald Trump said he would soon begin accepting campaign donations in crypto. \"While the news of the ether ETF is undoubtedly positive, the real excitement lies in the underlying reason for the SEC's sudden change,\" said RachelLin, CEO and co-founder ofthe decentralized derivatives trading platform SynFutures. \"Until recently, the SEC and a faction of the U.S. administration had seemingly pursued an anti-crypto policy to stifle the sector. However, there seems to be a growing political realization within the administration that cryptocurrency is a matter that could sway the election.\" Landmark victory Then last week, one day before the SEC approved the rule change to allow ether ETFs, the House passed a crypto infrastructure bill called FIT 21 (the Financial Innovation and Technology for the21stCentury Act ), which would specify when crypto falls under the purview of the SEC versus the Commodity Futures Trading Commission. Many are hailing FIT 21 as a landmark victory for the industry. \"There's a sea change going on in politics right now,\" Oppenheimer senior analyst Owen Lau told CNBC. \"People are starting to realize that being anti-crypto is a bad politics.\" The Beltway consensus is that FIT 21 is unlikely to come up for a Senate vote, but Lau said its passage in the House lays the groundwork for the next Congress that will be seated next January. \"We are getting closer to regulatory clarity,\" he added. \"The problem with the status quo is there are no rules.\" As a result, \"there's a lot of unpredictability in this space that can push capital, talent and projects out of this country.\" Alex Thorn, head of research at Galaxy Digital, noted that there isn't much time in the legislative calendar for the passage of industry-friendly bills, with the summer recess looming and a Presidential election in the fall. Still, he didn't completely write off the Senate picking up existing efforts, such as the Lummis-Gillibrand Responsible Financial Innovation Act , co-sponsored by Democratic Senator Kirsten Gillibrand (N.Y.) and Republican Senator Cynthia Lummis(WY) , aimed at creating a comprehensive regulatory framework for crypto assets. \"I'd be surprised if FIT 21 or something like it actually becomes law this year,\" said Thorn. \"The politics of this are what is most interesting. It does portend a sweeping change in [the] Democratic leadership approach to this industry, and that can only help crypto.\" <\/p>\n
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SEC embrace of ether ETFs highlights cryptocurrency's shifting political fortunes - CNBC<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The newly opened door to ether ETFs is part of a larger story that dominated cryptocurrency markets last week: the industry's political tides appear to be shifting in its favor. Thursday night's approval by the Securities and Exchange Commission of a rule change that would pave the way for the creation of ether ETFs caught most market watchers off guard. Continue reading