The potential approval of spot Ether exchange-traded funds (ETFs) in the United States has significantly boosted the cryptocurrency market and marks a major advance in cryptocurrency regulation. Brokerage firm Bernstein suggests that Solana ($SOL) ETFs could be the next step.
The firm has revealed a recent research report indicating that other cryptocurrencies might receive similar regulatory treatment.
Analysts Gautam Chhugani and Mahika Sapra from Bernstein view the potential approval as a sign of a more lenient regulatory approach, possibly influenced by the upcoming November elections. They suggest that if Donald Trump is elected, the cryptocurrency sector could receive substantial legislative and agency support, including changes in SEC leadership.
The report also highlights that a spot Ether ETF approval would be groundbreaking, marking the first time a non-Bitcoin blockchain asset is classified as a commodity. This could pave the way for similar treatment of other blockchain assets like Solana.
Brian Kelly, a trader on CNBC’s “Fast Money,” also believes a spot Solana ETF could follow, citing Bitcoin, Ethereum, and Solana as the leading cryptocurrencies for the current cycle. He noted that firms like Robinhood and Coinbase now have better clarity on securities regulations, positioning them as key beneficiaries of this regulatory progress
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
Bernstein predicts a price surge for Ether similar to the 75% increase seen by Bitcoin after spot Bitcoin ETFs were approved. This week, Ether’s price already surged by over 20% amid optimism about these potential approvals.
The report underscores Ether’s appeal, with 38% of its supply locked in staking and decentralised finance protocols and a significant portion inactive for over a year.
Data from on-chain analytics firm Santiment shows that small Ether investors (those holding 10 ETH or less, roughly $37,500) have reached a new all-time high of 121.74 million. Conversely, larger investors holding between 10 and 10,000 ETH (between $37,500 and $37.5 million) are down about 5.8% this year. Larger whales, with holdings over $37.5 million, have reduced their ETH holdings by 10.6% over the past few months.