Politics Weighs Heavy on Spot Ether ETF Process
Democrats and Republicans are scrambling to draw cryptocurrency-holding voters, or at least not alienate them.
Anyone paying even casual attention to last week’s nod by the Securities and Exchange Commission toward a likely approval of spot Ethereum ETFs, had to recognize the politics driving the decision.
The Reader’s Digest version is that when Donald Trump announced his support for cryptocurrency investing, the Democrats and Joe Biden scrambled to appear equally if not more supportive of all things crypto.
“The Dems see this as a tie-or-lose situation, because there’s no winning in this election season being anti-crypto,” said Bloomberg Intelligence Senior ETF Analyst Eric Balchunas.
“Nobody is going to vote for Biden because he is anti-crypto, but some of the pro-crypto people are single-issue voters,” Balchunas added. “From everything we hear from people involved in the process, it appears [SEC Chairman Gary] Gensler is acting on behalf of Biden.”
Read More: SEC Changes Ethereum Rule, Sets Stage for ETF Approval
While the SEC might have shown its political colors through its approval of a rules change that could allow major exchanges to list spot Ethereum ETFs, Donald Trump should receive some credit for the vocal support that likely forced the hand of Democrats eager not to alienate the cryptocurrency industry, an increasingly vocal voting bloc.
It is tempting to employ the adage here about politics making strange bedfellows, but the reality is Trump and Biden weren’t working in tandem toward a common goal. They were just racing each other toward a political advantage.
Were Investors Shortchanged?
That brings us to the bigger question of how or when the SEC might have ruled had politics not been so overtly in play.
The Commission’s deliberate due diligence was on full display leading up to the January approval of the first spot bitcoin ETFs, which represents a kind of precedent for the ether-based version. Ether is the cryptocurrency of the Ethereum blockchain.
But now that the political influence behind Ethereum is out on full display, one can’t help but wonder if investors might end up being the victims of corner-cutting in the interest of political expedience.
