beehiiv-import

⚡SEC Likely to Deny Ether ETFs❌

Croxroad

10 Apr 2024 — 4 min read

☕️ GM Dear Plebs!

Here is Crox Road, your daily dose of orange pill that will turn you into a Bitcoin Maxi.

The menu for today:

⚠️ Ether ETFs Facing Rejection by SEC

On Tuesday, issuers of spot Bitcoin exchange-traded funds voiced scepticism regarding the potential approval of similar products for the cryptocurrency Ether by the U.S. Securities and Exchange Commission (SEC). With a late-May deadline looming for the regulator's decision on an Ether ETF, concerns have heightened following the SEC's decision in March to postpone its original deadline for deliberation on the Ether ETF application.

Several prominent companies, including BlackRock, Fidelity, and VanEck, which have successfully launched spot Bitcoin ETFs this year, have been eagerly awaiting approval for an Ether product. However, some issuers, such as VanEck CEO Jan Van Eck, express doubts about the SEC's inclination to greenlight the Ether applications. Van Eck candidly stated, "We were the first to file as well for Ethereum in the U.S., and we and Cathy Wood are kind of the first in line for May, I guess, to probably be rejected," underscoring a prevailing sense of uncertainty within the industry.

Enthusiasm within the crypto community for an Ether ETF has been palpable, particularly since the SEC's approval of the first spot Bitcoin ETFs in January. Despite the optimism driving the Ether price upwards in recent days, surging approximately 10% over the past week according to CoinGecko data, the SEC's stance remains cautious. Chair Gary Gensler has emphasised the SEC's view that "the vast majority of crypto assets are investment contracts and thus subject to the federal securities laws," signalling potential obstacles for an Ether ETF approval.

CoinShares CEO Jean-Marie Mognetti echoed sentiments of scepticism, noting the complexity of gaining SEC approval, especially in the short term. With CoinShares abstaining from the race for an Ether ETF in the U.SMognetti expressed doubts about approvals materialising before the year's end, particularly highlighting potential challenges associated with proof of stake, a protocol specific to blockchain. Despite differing protocols, the SEC has not raised concerns about proof of work, the foundation underlying Bitcoin's operations, from a securities law perspective. As the industry awaits the SEC's decision, uncertainty looms over the future of Ether ETFs in the United States.

🏮 Shift in Consumer Attitudes

According to a survey conducted by Deutsche Bank and published on Monday, consumer sentiment towards Bitcoin appears to be undergoing a subtle shift, marked by a slight reduction in scepticism. Despite this trend, nearly a third of respondents still harbour concerns about a sharp drop in Bitcoin's price by the end of 2024, underscoring persistent uncertainties within the market. While individuals have invested significant sums in Bitcoin, seeking returns from potential price appreciation, regulatory authorities caution that the cryptocurrency lacks intrinsic value and carries inherent risks.

The survey, which polled over 3,600 consumers, revealed an evolving perception of cryptocurrencies, with 52% of respondents now viewing them as an "important asset class and method of payment transactions" in the future. This represents a notable increase from less than 40% recorded in September 2023. However, a significant proportion of U.S. respondents remain cautious, with a third anticipating Bitcoin's price to dip below $20,000 by the end of 2024, albeit a slight decrease from previous months.

Despite the ongoing shift towards greater acceptance of cryptocurrencies, only 10% of respondents expect Bitcoin's price to surpass $75,000 by year-end, indicating lingering reservations among investors. The recent resurgence in Bitcoin's price, reaching a three-week high, has been attributed to growing excitement surrounding spot Bitcoin ETFs and expectations of imminent rate cuts. Looking ahead, analysts foresee potential support for Bitcoin's price from various factors, including the upcoming "bitcoin halving," regulatory developments, central bank policies, and the anticipated approval of spot Ethereum ETFs by the SEC. As Bitcoin continues to navigate regulatory hurdles and market dynamics, the evolving sentiment among consumers reflects the ongoing maturation of the cryptocurrency landscape.

🪝 Earning Staking Rewards

Staking rewards in cryptocurrency are treated similarly to mining proceeds for tax purposes. Taxes on staking rewards are calculated based on the fair market value of the rewards on the day they are received. It's important to note that for staked Ethereum (ETH), income earned will be considered taxable at the time Coinbase customers gain control over those rewards, which typically occurs when they are able to unstake, regardless of whether the user chooses to unstake or continue staking. Understanding the taxation of staking rewards is essential for cryptocurrency investors to ensure compliance with tax regulations.