How will the decision of the US authorities not to assign Ethereum the status of a security affect ether and crypto in general?
The SEC’s decision not to assign Ethereum the status of a security is a very positive development for Ether and the entire cryptocurrency market.
Firstly, it removes the huge regulatory uncertainty around the second largest cryptocurrency by capitalization.
Secondly, it paves the way for the official launch of spot ETH ETFs on US exchanges, which will increase the availability and liquidity of Ether, and could draw in new institutional investors.
Third, it strengthens Ethereum's status as a decentralized blockchain and store of value/settlements.
The closure of the investigation sets a precedent that large decentralized blockchains are not treated as securities. This will enhance legal certainty for developers and companies in the crypto industry and strengthen confidence in cryptocurrencies as a mainstream asset class.
Overall, this SEC decision is a big win for cryptocurrency advocates, confirming their decentralized nature. The news caused the price of Ethereum to spike up to $3,585 in morning trading. In our view, investors showed a weak reaction to this news.