Despite the fact that it has been predicted that Ethereum will have a tumultuous week ahead, investors seem not to care. The price of the second largest digital currency by market value hit the 800 USD mark this Friday (and is currently trading at the 795 USD level) which is a monthly high apart from being a 118% rise since April’s low of 367 USD.
Good News For Crypto Investors
The rally creates optimism from investors. However, there’s a lot to be desired regarding Ethereum. As reported by an article in the Wall Street Journal published this Tuesday, regulators in the United States are considering whether Ether (and other virtual currencies) should be regarded as securities and regulated as such. The report shows that a group comprising of senior CFTC and SEC officials will meet to further discuss the issue on May 7, 2018.
Ethereum is designed to handle decentralized applications, making it more difficult to classify it as a security. The Ethereum Foundation holds below 1% of tokens from the platform, meaning it has a limited direct influence on prices. Ethereum was funded through an ICO offering in 2014 and has raised 18.3 million USD in Bitcoins. Its price did increase into thousands since that time.
Should regulators declare the digital currency security, it would result in severe ramifications for Ethereum and other Blockchain-based digital coins, many of which launched on Ethereum’s platform. One regulator said many ICOs are working “outside of the law,” which is another way to say they are working “illegal.” However, the report shows that whatever the SEC decides, we will likely be anticipating lengthy court proceedings that could take as long as several months or even a few years.
The report caused a drop in Ether’s price, but the digital currency’s recovery was swift, due to Joseph Lubin, the platform’s co-founder declaring he is comfortable with Ethereum not been regarded as security.