Cryptocurrency is quickly becoming an election issue, with Ethereum (ETH-USD) emerging as a significant beneficiary. From Monday to Tuesday, Ether surged 21%, marking its best two-day performance since January 2021.
This rally occurred despite initial concerns about the prospects for the next big crypto surge. The government’s hesitation to approve a suite of spot Ether ETFs had dampened enthusiasm. This hesitation contrasted with the excitement over Bitcoin ETFs, which had revitalized the crypto market late last year and sustained its momentum into this year.
The general expectation was that widely available crypto ETFs would facilitate crypto adoption among latecomers, allowing less crypto-savvy investors to allocate a “responsible” portion of their 401(k)s to these new ETFs. However, Jim Bianco of Bianco Research cast doubt on this theory, especially with the Securities and Exchange Commission showing no signs of approving spot Ether ETFs as a crucial deadline approached.
Then, according to Anthony Pompliano in the Pomp Letter, “the game changed.” On Monday, Bloomberg’s Eric Balchunas and James Seyffart increased their odds of spot Ether ETF approval to 75% from 25%, citing “chatter that the SEC could be doing a 180 on this increasingly political issue.”
This sudden shift in the SEC’s stance led to a surge in Ether prices. Matt Hogan, Chief Investment Officer at Bitwise Asset Management, highlighted this development on Yahoo Finance’s Market Domination. He noted a “real sea change in Washington around crypto,” with recent bipartisan crypto legislation and a growing coalition around stablecoins.
Hogan emphasized that “Washington has gotten the message that crypto is good for America and popular with American voters.” This change in sentiment was also reflected in former President Donald Trump’s recent pro-crypto stance.
Whether or not the SEC’s apparent change of heart is related, crypto enthusiasts are energized by the prospect of political support. Pompliano articulated this optimism, stating, “A bunch of people on the internet created a $2.6 trillion industry in the face of government pressure. Imagine what happens when the government is now actively courting these individuals and companies, along with embracing the technology. The headwind becomes a tailwind quickly.”
Spoken like a true crypto bull.
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