SEC Roundtable May Alter Perspective on Ethereum ETF Approval - CNBC's Macheel

The U.S. Securities and Exchange Commission (SEC) is hosting its inaugural roundtable on cryptocurrency regulation, with a focus on determining the security status of digital assets.

This gathering signifies the commencement of a dialogue series by the SEC's newly established crypto task force, which might have substantial consequences for the overall cryptocurrency market.

Classifying crypto assets as securities

As reported by Tanaya Macheel of CNBC, the SEC's initiatives are aimed at delivering more transparent guidelines on whether specific cryptocurrencies should be categorized as securities, a matter that has caused friction between the SEC and the crypto industry.

"The previous administration's SEC pursued many companies for their engagement with crypto, alleging most coins were unregistered securities but failing to provide clear guidelines to avoid being targeted," Macheel stated.

The current roundtable could also impact Ethereum (ETH) exchange-traded funds. Despite the SEC recently asserting that meme coins are not deemed securities, the agency has yet to elucidate its position on staking services associated with crypto ETFs, a factor that could influence future market growth.

"The demand for ETH ETFs has been lackluster compared to Bitcoin ETFs, and one of the major reasons is the inability to earn a staking yield on those funds," Macheel said. "If the SEC can resolve some of the uncertainties about those services potentially being unregistered securities, it could alter the prospects for ETH ETFs."

Bitcoin remains steady while Ethereum falters

Regardless of the regulatory ambiguity, Bitcoin (BTC) has managed to maintain stability in recent weeks. Macheel observed that Bitcoin is trading close to its 200-day moving average near $84,000, which traders view as a critical technical support level.

"If it can maintain the 200-day, that's positive," she remarked. "Long-term, however, Ethereum is more intriguing. It's simply been neglected. There are significant short positions with hedge funds, but Bitcoin has undeniably outperformed."

Market forecast remains ambiguous

Ethereum's underperformance relative to Bitcoin has been a noticeable pattern. Although Bitcoin has held steady, Ethereum has had difficulty gaining traction despite growing institutional interest in ETH-based financial products.

Macheel also highlighted that the broader cryptocurrency market has witnessed relatively muted activity compared to other asset classes like gold.

"Gold surpassed $3,000 this year while Bitcoin has been lingering in the low $80,000 range," she said. "Occasionally, the most unexciting assets are the biggest winners."

Investors are closely observing to see if the SEC's roundtable will offer clarity on staking and the wider regulatory framework for cryptocurrencies. A more well-defined regulatory environment could facilitate increased adoption and the introduction of new financial products related to cryptocurrencies.