Michael Saylor, the founder and executive chairman at Microstrategy has shared his doubts on spot Ether exchange-traded funds (ETFs) being approved by the U.S. Securities and Exchange Commission (SEC) in the coming months.
The bitcoin (BTC) maximalist has also reiterated his stance on altcoins, upholding that they are all unregistered securities.
Spot Ether ETFs will not be approved this summer, Saylor says
Prominent digital assets managers in the U.S. have been pushing for spot ETH ETFs since the historic approval of 11 spot bitcoin ETFs by the SEC in January 2024. These investment giants, including BlackRock, Grayscale, Van Eck, Franklin Templeton and ARK Invest amongst others have all submitted official registration statements with the regulatory agency to issue their respective spot ETFs for ETH, the second-largest cryptocurrency by market capitalization.
The U.S. SEC has delayed its decision on spot ETH ETFs, triggering varied speculations from top industry players, including Microstrategy‘s Michael Saylor. During the just-concluded Bitcoin For Corporation event, Saylor told attendees that spot ETH ETFs will not be approved by the U.S. SEC amid the increasing pressure from asset managers and crypto market participants, noting that ETH is considered a commodity by the regulatory watchdog.
Speaking in a panel discussion, he said:
You could see the writing on the wall when the spot ETF of Bitcoin was approved in January. By the end of May, you’ll know that Ethereum is not going to be approved, and when Ethereum is not approved this summer, it’ll be very clear to everyone that ETH is deemed a crypto asset security, not a commodity.
Michael Saylor
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Flaunting BTC as the only safe crypto asset, Saylor also tagged other altcoins as “unregistered securities.” On this premise, the Microstrategy founder opined that institutional acceptance of altcoins may not be possible this decade.
It bears mentioning that the XRP Ledger native token, XRP, was removed from the securities bracket in July 2023, following a ruling by a federal judge in the age-long Ripple-SEC lawsuit. The judge stated categorically that XRP — as a digital token — is not a security, adding that its sales on secondary marketplaces do not also constitute a security.
Saylor upholds that altcoins are “unregistered securities“
Wall Street regulators view “everything down the stack” (altcoins) as unregistered cryptocurrency securities, Saylor said. This explains the ongoing SEC crackdown on Ethereum and other crypto assets.
An April 2024 report by FOX Business shows that Gary Gensler and the SEC have considered ETH to be an unregistered security trading out of compliance with existing federal regulations for at least a year. These beliefs came after the largest smart contracts platform transitioned from the proof of work (PoW) to the proof of stake (PoS) consensus mechanism.
According to the report, the SEC’s Division of Enforcement Head Gurbir Grewal, “approved a formal order of investigation into Ethereum’s status as a security on 28 March 2023, authorizing enforcement staff to investigate and subpoena individuals and entities involved in the buying and selling of the ethereum token.”
Describing this as the agency’s illegal attempt to reframe its constitutional authority to include oversight on ETH, the Ethereum-backed company Consensys filed a lawsuit against the U.S. SEC on 25 April 2024 to stop the regulator from overseeing the Ethereum blockchain.
Consensys’s action was also triggered by the April 10 Wells notice it received from the agency over its MetaMask wallet services. The SEC also issued a Wells notice to Uniswap Labs, the developer of the leading Ethereum-based decentralized exchange (DEX) protocol.
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