According to JPMorgan analyst Kenneth B. Worthington, Ethereum exchange trading will begin in November. Previously, the U.S. Securities and Exchange Commission (SEC) approved the applications of eight Ethereum exchange trading applicants, including major Grayscale Investments, Bitwise Asset Management, BlackRock, etc. However, before trading can begin, these exchange-traded funds still need to wait for the SEC's approval of their S-1 registration.
Removing Ether Staking from ETF Proposal Boosts Approval Chances
Worthington said staking is a key issue between fund issuers and the SEC because it is unclear whether ETH staking by issuers on behalf of ETF shareholders constitutes an investment contract and thus a security under the Howey test.
The SEC uses the Howey test, which stems from a 1946 U.S. Supreme Court decision, to help determine whether a transaction constitutes an investment contract and therefore subject to securities laws. Under that test, a security exists when money is invested in a common enterprise that has a reasonable expectation of success with the efforts of others.
The current application has been amended to no longer mention staking rewards and states that these rewards will not be passed on to investors, a change that is believed to have influenced the recent regulatory approval.
Politics will play a key role in Ethereum exchange trading
Additionally, Worthington believes that cryptocurrency will become “an increasingly important political issue” ahead of the 2024 U.S. presidential election.
Justin Sun, founder of the Tron blockchain, has urged the crypto community to support pro-cryptocurrency candidates in the upcoming elections. In a recent social media post, Sun stressed the importance of supporting a pro-cryptocurrency presidential candidate.
“We should support a presidential candidate who supports crypto,” he said. “We need to demonstrate to the candidate that the crypto community, companies, and protocols are important stakeholders whose voices should be heard and whose interests should be protected.”
Former President Donald Trump, once a strong critic of cryptocurrencies, has changed his stance and now supports the cryptocurrency industry and has included it in his re-election campaign.