Ethereum price continues to show uncertainty, Consensys CEO says SEC aims to stifle crypto innovations
- 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.
Read more: Ethereum resume sideways move as Grayscale files to withdraw Ethereum futures ETF application with the SEC
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 FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.
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