When will $ETH become a security and how will this affect the price of the coin?
Michael Saylor, founder of MicroStrategy and a prominent proponent of Bitcoin, has argued that Ethereum is essentially a security. He emphasized that the token was originally released as part of the ICO, and hard forks, or updates that did not
compatible with previous versions of the network, change the essence of this asset. While some assets, such as gold or Bitcoin, retain their essence regardless of change, Ethereum, according to Saylor,
has more in common with securities.
Recognition of Ethereum as a security seems unlikely, although after the transition to the Proof-of-Stake algorithm, the chances of recognition of such status as the second cryptocurrency by capitalization may definitely become
higher, says Chen Limin, CFO of the ICB Fund crypto fund.
Ethereum's transition to security status could affect its price in several ways:
1) Once $ETH becomes a security, it will open up investment to many institutional players, which could lead to more capital from large funds and investment companies.
2) Security status can highlight stricter regulatory oversight and transparency, which in turn will strengthen confidence in ETH as an investment asset.
3) The transition to security status may lead to additional regulatory requirements and restrictions, which may create additional pressure on developers and network users.
Ethereum's transition to security status is a complex process with pros and cons for price and the ecosystem. The outcome depends on a number of factors, including regulatory policies, market conditions and community response.
