The potential approval of spot Ether exchange-traded funds (ETFs) in the United States has helped boot the cryptocurrency market significantly and is a significant step forward in cryptocurrency regulation, according to brokerage firm Bernstein, which suggested that Solana ($SOL) exchange-traded funds could follow.
According to a recent research report from the brokerage firm, which comes ahead of an expected spot Ether ETF application from the U.S. Securities and Exchange Commission (SEC), similar treatment could come to other cryptocurrencies.
In the report, Bernstein analysts Gautam Chhugani and Mahika Sapra noted the see the potential approval as a sign of softening regulatory stance, possibly influenced by the upcoming November elections, adding bey believe that if Donal Trump is elected “crypto could see significant legislative and agency support” with a shift to the SEC’s leadership.
More immediately, the report highlights the potential precedent set by a spot Ether ETF as it would mark the first time a non-Bitcoin blockchain asset is classified as a commodity, potentially opening the door for similar treatment of Ethereum’s rivals, particularly Solana.
Notably, CNBC “Fast Money” trader Brian Kelly has also suggested that a spot Solana ETf could follow, saying that Bitcoin, Ethereum, and Solana “are probably the big three for this cycle.”
Oh weird @cnbc says $SOL is the next ETF.Hmm, where have I heard that before… pic.twitter.com/aYAedMhcM0
— ◢ J◎e McCann 🧊 (@joemccann) May 22, 2024
He added that Robinhood and Coinbase now have “some clarity on what a security is and what a security isn’t,” suggesting these two firms are the largest beneficiaries from regulatory clarity.
Bernstein predicts a price surge for Ether similar to the 75% increase witnessed by Bitcoin after the approval of spot Bitcoin ETFs, while earlier this week the price of ETH already surged over 20% as optimism surrounding the potential approval of these funds grew.
The report cites Ether’s free float and supply as particularly attractive – with 38% locked in staking and decentralized finance protocols, and a significant portion of the supply remaining inactive for over a year.
As reported, the number of small ETH investors, those holding 10 ETH or less (around $37,500), has recently climbed to a new all-time high while larger investors are seemingly still lagging behind after divesting most of their funds over the last few months.
According to data from on-chain analytics firm Santiment, smaller Ethereum wallets hits a new all-time high of 121.74 million after the recent ETH price surge, while those holding between 10 and 10,000 ETH – between $37,500 and $37.5 million – are still down around 5.8% this year.
Notably larger whales, those that have over $37.5 million worth of the second-largest cryptocurrency by market capitalization in their wallets, are down 10.6% in terms of total holdings after divesting of their ETH over the last few months.
Featured image via Unsplash.
