What happened
Most cryptocurrencies moved higher today, as more mainstream financial institutions filed to launch spot Bitcoin exchange-traded funds (ETFs) and as altcoins gained steam.
Since late afternoon yesterday, the price of the world's second-largest cryptocurrency, Ethereum (ETH -0.49%), traded 3.4% higher as of 10:35 a.m. ET today. Meanwhile, the price of the meme token Shiba Inu (SHIB -0.19%) traded 4.5% higher, while the price of Bitcoin Cash (BCH -1.24%) had jumped nearly 26%.
So what
Ever since the world's largest asset manager, BlackRock (BLK), filed with the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin ETF, cryptocurrencies have been rallying on the belief that more interest in the sector from mainstream financial giants will ultimately increase exposure.
Image source: Getty Images.
While other spot Bitcoin ETFs have been rejected by the SEC, BlackRock's filing seemed to change the game because it proposed a surveillance-sharing agreement with the Nasdaq, where it intends to list the ETF. This agreement would share information about trading activity and the identity of customers, which the SEC believes is necessary to prevent market manipulation.
Following BlackRock, a swarm of other players have proposed Bitcoin ETFs with the SEC and the latest is Fidelity, which has also proposed to have a surveillance-sharing agreement. These ETFs would ultimately make it easier for investors to gain access to Bitcoin without having to buy the cryptocurrency itself.
In other news, Bitcoin Cash has been exploding higher all week, most recently on a ton of trading volume out of investors in South Korea. The excitement continues to be fueled by the news that Bitcoin Cash is one of four cryptocurrencies being listed by a new exchange called EDX Markets, which is backed by Fidelity, Charles Schwab, and Citadel.
Interestingly, the exchange decided to list Bitcoin Cash because it believes regulators are likely to determine that the cryptocurrency is a commodity and not a security. Whether or not cryptocurrencies are commodities or securities is a big point of contention in the crypto ecosystem right now. Commodities would be regulated by the Commodity Futures Trading Commission, while securities would be overseen by what is presumed to be the much stricter SEC.
In more regulatory news today, a new bill that formally recognizes cryptocurrencies as a regulated financial instrument and investment was officially made a law today in the United Kingdom. Many believe that regulatory clarity is a necessity for crypto to be able to move forward.
Now what
News regarding spot Bitcoin ETFs has been the biggest driver of cryptocurrencies in recent weeks, so it makes sense that the news regarding Fidelity continued to fuel the sector today.
But the fact that investors are pouring into Bitcoin Cash because they think the token is likely to be deemed a commodity instead of a security is interesting and could represent a newer trend in the industry.
With the SEC seemingly getting more aggressive in its attempts to bring more cryptocurrencies under its purview, investors may start to favor those that they view as commodities. While I still like Ethereum the best in this group of cryptocurrencies, this is certainly a trend that bears watching.
