Ethereum’s steady pace to recovery seemed to have been disrupted thanks to the rumours about the regulatory meeting.
While the SEC and CFTC are trying to figure Ethereum out, the price has taken a 5% dip over 24 hours. Analysts believe that the drop is most likely related to the rumoured meeting about Ethereum by the United States regulatory authorities. The meeting is meant to determine the right classification of Ethereum. The SEC and CFTC will sit to decide if ETH should be treated as a commodity or as a security.
What is Ethereum’s Fate?
You’ll recall that the reports from Wall Street Journal last week was that the Securities and Exchange Commission and the Commodities and Futures Trading Commission were making plans to debate the fate of Ethereum and some other cryptocurrencies on the 7th of May.
The entire cryptocurrency community has been anxious about the outcome of the meeting, and it has become a hot topic in the industry as the outcome will have a serious impact on Ether.
Would Ethereum Do Well As a Security?
If the regulators are to classify Ether as a security, there will be significant implications on other cryptocurrency startups and blockchain-based tokens. Those based on the ERC20 standard will be affected the most.
SEC will require that all exchange desks are registered. Those who do not oblige will be fined. Dropping Ether from trading platforms will reduce its value in the market.
The SEC believes that Ether and Ripple are, in some ways, similar to securities. However, Joseph Lubin, co-founder of Ethereum, said that the chances that Ether will be classified as a security are slim. He said that he isn’t concerned about Ether being classified as a security.
While many attribute the drop in price to the meeting by the regulators, it’s important to remember that the cryptocurrency industry is highly volatile and so a five percent increase or decrease in price isn’t a significant development.