Cryptocurrencies are quickly becoming an election issue, and Ethereum (ETH-USD) is emerging as a key beneficiary. From Monday to Tuesday, Ethereum surged 21%, marking its best two-day performance since January 2021.
The rally comes despite initial concerns about the prospect of the next cryptocurrency surge. Enthusiasm has been dampened by government hesitation to approve a spot Ether ETF. This hesitation contrasts with the excitement over Bitcoin ETFs, which energized the cryptocurrency market late last year and maintained its momentum well into the year.
The general expectation was that widely available cryptocurrency ETFs would spur cryptocurrency adoption by latecomers, allowing investors with limited cryptocurrency knowledge to allocate a “responsible” portion of their 401(k)s to these new ETFs. Yes. However, Jim Bianco of Bianco Research questions this theory, especially with the Securities and Exchange Commission showing no signs of approving a spot Ether ETF despite the important deadline looming.
Then, according to Pomp Letter’s Anthony Pompliano, “the game changed.” On Monday, Bloomberg’s Eric Balchunas and James Seyffart raised their odds of approval for a spot Ether ETF from 25% to 75%, citing “saga that the SEC could do a 180-degree turn on increasingly political issues.”
The sudden change in the SEC’s position caused the price of Ethereum to soar. Matt Hogan, Chief Investment Officer at Bitwise Asset Management, highlighted this development in Yahoo Finance’s market dominance. He noted “a real shift in Washington surrounding cryptocurrencies” due to recent bipartisan cryptocurrency legislation and the growth of a coalition around stablecoins.
Hogan emphasized, “Washington received the message that cryptocurrencies are good for America and are popular with American voters.” This change in sentiment was also reflected in former President Donald Trump’s recent pro-cryptocurrency stance.
Whether or not it has anything to do with the SEC’s apparent change of heart, cryptocurrency enthusiasts are encouraged by the prospect of political support. “Many people on the Internet have defied government pressure and created a $2.6 trillion industry,” Pompliano said. Now imagine what will happen when governments embrace technology while also actively courting these individuals and companies. “A headwind quickly turns into a tailwind.”
Spoken like a true cryptocurrency bull.
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