- Ethereum co-founder alleges that the SEC aims to stifle innovation through its enforcement actions against Ethereum-related companies.
- Grayscale CEO says he's optimistic the SEC would approve its spot ETH ETF application.
- Bloomberg analyst says they're "as pessimistic as ever" that spot ETH ETFs would see approval in 2024.
Ethereum's (ETH) price revealed a continuation of uncertainty among traders on Thursday despite optimism expressed by Grayscale about its spot ETH ETF. Ethereum co-founder Joseph Lubin also blasted the Securities & Exchange Commission for their recent enforcement actions against Ethereum-related companies.
Also read: Ethereum could experience bullish run, ETH ‘ultrasound’ money narrative at risk
Daily Digest Market Movers: Joseph Lubin blasts SEC, Grayscale ETH ETF draws mixed views
Ethereum co-founder and Consensys CEO Joseph Lubin said the SEC aims to create fear, uncertainty, and doubt for the crypto industry by taking enforcement actions against Ethereum-related companies instead of providing clear regulations.
In a session at Financial Times (FT) Live's Crypto and Digital Asset summit in London, Lubin said the SEC seemed to have classified Ethereum without telling anybody. He described the regulator's recent actions as a deliberate attempt to stifle innovation "that will really transform the landscape."
Consensys earlier sued the SEC in April for exercising "unlawful authority" over Ethereum after receiving a Wells Notice from the regulator. Lubin said the aim is to get clarity from the courts on Ethereum's status as the Commodity and Futures Trading Commission (CFTC) has already classified it as a commodity.
He also noted that the SEC may be concerned about the increased attention and capital that Ethereum is getting, considering its improvement in scalability and usability.
Lubin stated that recent actions targeted against Ethereum-related firms could be because of the upcoming deadline for the SEC to decide on Van Ecks' spot ETH ETF application. "We believe that there's a flurry of activity designed to enable them to say that their action wasn't capricious in the very likely event that they deny the Ether spot ETFs," said Lubin.
Meanwhile, Grayscale CEO Michael Sonnenshein also said at the summit on Wednesday that he's confident that the SEC would approve the company's application to convert its Ethereum Trust to a spot ETF. This comes after the company withdrew its application for an Ethereum Futures ETF on Tuesday. "At Grayscale, we decided to focus our energy on our spot products. That's really core to our DNA," he said.
However, many interpreted Grayscale's decision to withdraw its ETH Futures ETF application as a sign of an impending spot ETH ETF denial from the SEC. Considering it took Grayscale to defeat the SEC in a legal battle for Bitcoin ETFs to come to the market, many had earlier anticipated the firm might do the same if its spot ETH ETF application is denied.
In response to Sonnenshein's optimism, Bloomberg analyst Eric Balchunas disagreed that the SEC would approve a spot ETH ETF this year, stating they're "as pessimistic as ever." He also mentioned that the US election in November is a "big variable" in determining whether a spot ETH ETF will come to market.
Uh, disagree. We are as pessimistic as ever. I mean at some point it could happen, but not within a year IMO. What they say in denial and the Nov election are big variables that could fine tune the outlook tho. Btw he also said they withdrew the '33 Act Ether Futures ETF bc they… https://t.co/IpPzgGbgoz
— Eric Balchunas (@EricBalchunas) May 9, 2024
ETH Technical Analysis: Ethereum awaits a bullish trigger
Ethereum traded in the $3,000 zone as uncertainty in the crypto market continued into Thursday. As previously stated, ETH may be gathering momentum for a potential bull run, considering it has remained at $2,852 to $3,300 for nearly a month.
Also read: Ethereum traders show uncertainty, SEC delays decision on Invesco's ETH ETF application
ETH is beginning to tilt towards the side of long traders, and rising open interest in Binance, OKX and CME strengthens what could be the beginning of a rally, according to data from Coinglass. Although the digital asset may experience short-term volatility as the May 23 deadline for the SEC to decide on Van Ecks' spot ETH ETF draws closer.
ETH/USDT 4-hour chart
ETH may grow slowly but steadily to trade above the $3,161 resistance of April 30. A breakout above $3,300 would see ETH's potential bullish run enter full swing. However, a bullish trigger is needed to sustain such a rally.
Ultimately, the price of Bitcoin would be a key factor in determining ETH's next price movement.
Ethereum is trading at $3,017 at the time of writing.
Ethereum development FAQs
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year. The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed. At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades. The decision comes after these developers reach a consensus for a software upgrade. The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones. A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players. It has been a long-standing concern for the Ethereum network. The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network. This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north. The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.
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