The SEC doesn't know what to do with Ethereum | Vladimir Okhotnikov / Massmedia / Vladimir Okhotnikov

The SEC doesn't know what to do with Ethereum | Vladimir Okhotnikov

18 June 2024

The SEC Change in Position on Ethereum Sets a Dangerous Precedent | Vladimir Okhotnikov

When will the Solana (SOL) and Ripple (XRP) ETFs launch? 

According to analysts at Standard Chartered Bank, there is a possibility that in 2025, exchange-traded funds (ETFs) will appear on the market, the underlying assets of which will be the altcoins Solana (SOL) and Ripple (XRP).


This will open a new page in the history of the crypto industry and could be the beginning of a long process of integrating altcoins into traditional financial instruments. However, regulatory approval of such ETFs is in question, especially in light of the SEC's recent decision to recognize the SOL token as a security.


If the US Securities and Exchange Commission recognizes SOL as a security, then obtaining approval to launch a spot ETF for this cryptocurrency will be problematic. However, the situation may change in the future, as happened with Ethereum. If regulators reconsider their position or the necessary changes are made to legislation, then it is likely that we will see a new surge in interest from institutional investors.


At the same time, not everyone shares the enthusiasm for adopting a spot Bitcoin ETF. Thus, the head of Cardano, Charles Hoskinson, was skeptical about the prospects of BTC. In his opinion, Bitcoin is more like a religion than a full-fledged ecosystem, and is not necessary for the development of the industry.

The net money inflows have been observed in BTC-ETF already for 10 days in a row


Hoskinson believes that the future lies in more technologically advanced blockchain projects that can offer real use cases and solve pressing problems. However, for now, Bitcoin remains a key asset in the cryptosphere, and it is clearly premature to talk about its imminent “death.”


As for Charles Hoskinson’s opinion about the uselessness of Bitcoin, it is quite controversial. BTC remains the first and most capitalized cryptocurrency with widespread acceptance. Although the development of the ecosystem around BTC is slower than that of some altcoins, it is premature to say that it will not survive.


There are also concerns that the approval of ETFs for Solana, Ripple and potentially other altcoins could lead to the devaluation of the value of exchange-traded funds for investors. Mr Hoskinson's position is valid. But the launch of a large number of ETFs for various cryptocurrencies, including those with dubious value and prospects, can really “dilute” the value of this instrument in the eyes of institutions.


In justification, the approval of ETFs for SOL, XRP and other top altcoins could attract new large investors into the industry, and this will contribute to even more widespread adoption of cryptocurrencies. At the same time, it is important that regulators carefully check and allow ETFs to be launched only for truly reliable and promising assets.


To do this, projects will need to prove their maturity, stability and compliance with a number of criteria that the SEC considers important for recognition of an asset not as a security, but as a full-fledged decentralized ecosystem.


Such conditions may include:


  • high level of network decentralization and lack of influence of the central organization on its work;

  • widespread distribution and use of cryptocurrency in real cases, and not just as a speculative asset;

  • the presence of an active community of developers and users independent of the project founders;

  • transparency and openness in communication with regulators and willingness to follow established rules;

  • solving problems with network security, scalability and other technical aspects.


Meeting these and other conditions will require projects to take time and effort. But if successful, they will be able to count on more favorable treatment from the SEC and other regulators.


General progress in the development of the regulatory framework for the crypto industry will also play an important role. If clear and understandable rules of the game are adopted, taking into account the specifics of digital assets, this will remove many questions and facilitate the approval process of new financial instruments.


In any case, the path to mass acceptance of cryptocurrencies by the traditional financial system, as we see, is not easy and requires dialogue between the industry and regulators. But the potential benefits of integrating digital assets into the global economy are too great to avoid.


In general, the situation with the possible launch of altcoin ETFs in 2025 remains uncertain and will depend on many factors - the position of regulators, the development of the projects themselves and the crypto industry as a whole. However, the very formulation of the question speaks of the growing interest of traditional finance in cryptocurrencies and the desire to offer convenient tools for investing in them.


Vladimir Okhotnikov's Press Center