ETH Is a Commodity. Now What? – Emogi Coin

ETH Commodity Designation Is ‘Huge’

Crypto fund manager Brian Kelly described the regulatory clarity on the second biggest cryptocurrency as being kind of a big deal, something that he’s more focused on than the SEC’s latest rejection of a bitcoin ETF.

“The CFTC saying that Ethereum is a commodity is huge for the space. It gives us regulatory clarity. The CFTC has now said, ‘Listen, if you’re buying bitcoin or these smart contract platforms, they are commodities.’ That opens the door for institutions to come in.”

It means that big investors who earmark a percentage of their asset allocation to commodities such as oil can now direct a percentage of those funds to ETH, if they’d like, with confidence that regulators won’t come knocking on their door for having exposure to an unregulated asset. It also paves the way for ETH futures contracts as the next big thing in crypto.

Not Impressed?

Attorney Jake Chervinsky isn’t impressed, throwing cold water on the development and saying in a tweet:

“The CFTC calling ETH a commodity has nothing to do with securities laws at all. Securities are a *type* of commodity. Financial instruments can be one, both, or neither. Not to mention that the SEC already said ETH isn’t a security last summer.”

Perhaps. But Tarbert’s comments do a lot more than solidify the №2 cryptocurrency as a commodity. They show that the new chief of the CFTC is on the side of tech innovation, like his predecessor, which in the current climate of regulatory push-back and uncertainty can do a lot for sentiment in the crypto community, even though the markets didn’t rally on the news.

Meanwhile, Kelly is also anticipating a wave of demand for bitcoin (BTC) futures from macro investors, who he says like to buy commodities.

“You’re starting to see it. It’s a lot slower than we all thought. That ‘herd’ that was trampling it’s kind of tiptoeing but it’s actually happening,” said Kelly.

If and when Ethereum derivatives contracts make their way into the market, that macro fund demand that Kelly is observing could spill over into the ETH market as well.