In the United States, Bitcoin is universally viewed as a commodity by the country’s regulatory agencies, but the definition of Ethereum was unclear until now – presumably, the biggest point of contention was that ETH was initially distributed through an initial coin offering (ICO), while BTC is distributed exclusively through mining.
Yesterday, SEC’s William Hinman stated that ETH is not a security, and finally provided some clarity on the subject. After looking at Ethereum, the SEC looks to have decided that its level of decentralization is too high to say that the efforts of a single entity play a crucial part in determining the price of ETH.
In December last year, two U.S. exchanges, CME and CBOE, introduced Bitcoin futures contracts to the market. It was the first example of a Bitcoin-related product being traded on an institutional exchange in the United States. Bitcoin has been performing poorly in 2018 – if we combine this fact with the cryptocurrency community’s general disdain for institutional finance, it is no wonder a number of theories has emerged linking price drops to futures contracts.
If you’re in the camp that believes Bitcoin futures are depressing cryptocurrency prices, you most likely won’t be thrilled by the prospect of Ethereum futures contracts – with the SEC clarifying their position on ETH, they could arrive sooner than we think.
Chris Concannon, the COO of CBOE, said that the SEC’s newly clarified position on Ethereum could very well pave the way for Ethereum futures to become a reality:
“This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”