Major Crypto Developments: SEC Approves Ether ETFs, and Market Updates

Bitcoin's RSI Indicates Potential Breakout at $75,000

by Faruk Imamovic
Major Crypto Developments: SEC Approves Ether ETFs, and Market Updates
© Getty Images/Jack Taylor

On May 23, 2024, the U.S. Securities and Exchange Commission (SEC) gave a landmark approval to spot Ether exchange-traded funds (ETFs), marking a significant milestone in the cryptocurrency industry. This regulatory green light opens the door for major firms like VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise to move forward with their ETF plans. However, before these ETFs can officially commence trading, issuers are required to secure approval for their S-1 registration statements from the SEC.

A Sign of Recognition

The SEC's decision is seen by many industry experts as an implicit recognition that Ether is not classified as a security. This interpretation stems from the SEC's request on May 20 for applicants to expedite filings, with the removal of staking being the most significant amendment. This approval is not just a bureaucratic formality but a crucial step that could bolster investor confidence and pave the way for further adoption of Ethereum-based products.

The Impact on the Market

The approval of these spot Ether ETFs is expected to have a profound impact on the cryptocurrency market. ETFs offer a more accessible investment vehicle for both institutional and retail investors, potentially driving up the demand for Ether. By providing a regulated avenue for investment, the SEC's decision could mitigate some of the risks associated with direct cryptocurrency investments, attracting a broader investor base.

SEC Approves Ether ETFs
SEC Approves Ether ETFs© Getty Images/Jack Taylor

FIT21 Crypto Bill Passes the House

In another major development for the cryptocurrency sector, the Financial Innovation and Technology for the 21st Century Act (FIT21) passed the U.S. House of Representatives on May 22. The bill now faces an uncertain future in the Senate, where it confronts opposition from Senator Elizabeth Warren. FIT21 aims to grant the Commodity Futures Trading Commission (CFTC) primary oversight of cryptocurrencies, which the industry views as a more favorable regulator compared to the SEC.

A Shift in Regulatory Landscape

If passed, FIT21 would significantly alter the regulatory landscape for cryptocurrencies. The CFTC is generally perceived as a more lenient regulator, which could foster innovation and growth in the sector. The bill also introduces a mechanism allowing cryptocurrencies classified as securities to be sold as commodities, potentially simplifying the regulatory framework for these assets.

Opposition and Challenges

Despite its passage in the House, the bill faces significant hurdles in the Senate. The Biden administration and SEC Chair Gary Gensler have both expressed opposition to the proposed regulation. Senator Warren's resistance further complicates the bill's prospects, making its future uncertain. The debate around FIT21 highlights the ongoing struggle to find a balanced regulatory approach that fosters innovation while protecting investors.

Former FTX CEO's Transfer Sparks Controversy

Sam Bankman-Fried, the former CEO of the now-defunct FTX exchange, has been moved to a federal prison in Oklahoma despite a judge's recommendation to keep him in New York. As of May 23, Federal Bureau of Prisons records indicate that Bankman-Fried is being held at the Federal Transfer Center in Oklahoma City, a facility used for short-term inmate transfers.

Former FTX CEOs Transfer Sparks Controversy
Former FTX CEOs Transfer Sparks Controversy© Getty Images/Alex Wong

Bankman-Fried's transfer has raised eyebrows, given that Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York had recommended he remain at the Metropolitan Detention Center in Brooklyn. The reasons behind this unexpected transfer remain unclear, adding another layer of complexity to his legal saga.

Trump Campaign Embraces Cryptocurrency Donations

In a move that underscores the growing acceptance of cryptocurrencies, former U.S. President Donald Trump announced that his 2024 presidential campaign will accept donations in various cryptocurrencies. The campaign's fundraising page, launched on May 21, features options for donors to contribute using Bitcoin, Ether, Dogecoin, Shiba Inu, XRP, USD Coin, Solana, and 0x through the Coinbase Commerce platform.

Trump Campaign Embraces Cryptocurrency Donations
Trump Campaign Embraces Cryptocurrency Donations© Getty Images/Jeff Swensen

Potential Impact on Campaign Financing

Accepting cryptocurrency donations could provide the Trump campaign with a new stream of funding, potentially increasing its financial resources. This development also sets a precedent for future political campaigns, signaling that digital assets are becoming an integral part of the political fundraising landscape.

Winners and Losers in the Crypto Market

As the week concludes, the cryptocurrency market presents a mixed bag of performances. Bitcoin (BTC) stands at $68,181, Ether (ETH) at $3,668, and XRP at $0.53, with the total market capitalization reaching $2.53 trillion according to CoinMarketCap.

Among the top 100 cryptocurrencies, Bonk (BONK) leads the gainers with a 39.96% increase, followed by Pepe (PEPE) at 38.14% and Pendle (PENDLE) at 30.72%. On the losing side, Arweave (AR) saw a decline of 14.66%, Core (CORE) dropped by 11.60%, and Worldcoin (WLD) fell by 10.71%.

Prediction of the Week: Bitcoin's Bullish Potential

Bitcoin is displaying patterns reminiscent of its 2017 bull run, with the relative strength index (RSI) indicating a potential breakout at $75,000. Popular trader Jelle, in a May 24 post on X, pointed out that BTC/USD is mimicking the bullish divergence and choppy market conditions that preceded the 2017 surge to $20,000.

The RSI is a crucial metric that gauges whether an asset is overbought or oversold at a given level. Jelle's analysis suggests that Bitcoin's current RSI patterns could herald a significant price movement, provided it clears the $75,000 threshold.