Ethereum [ETH] has reclaimed the $2k mark for the first time since May, as the broader cryptocurrency market painted green in response to a U.S. federal judge’s decision that XRP should not be treated as a security in certain circumstances. The second-largest cryptocurrency by market capitalization at the time of writing has risen by over 7% over the past week, despite a modest decline to a current price of $1,999.
Prior to the XRP verdict, ETH struggled to breach the crucial $2k barrier for more than two months. In the daily time frame, ETH is still up around 6%, giving it a gain of 14% over the previous month. Leading altcoins such as Cardano [ADA], Solana [SOL], and Polygon [MATIC] have each raked up double-digit gains.
By comparison, the world’s dominant crypto asset, Bitcoin, didn’t budge much, edging up only by 2% as of this writing. Bitcoin remains unaffected by the ruling because it failed the Howey Test, indicating that a BTC transaction isn’t deemed an investment contract and therefore not a security.
It should be noted that Gary Gensler, the SEC head, declared in 2019 that BTC is not a security, and that has never been a problem. Ethereum, on the other hand, has been at the center of a contentious discussion among the crypto community about whether it is a security or a digital asset.
Ethereum & The Altcoin Troupe: The Road Ahead
When discussing the SEC’s approach to regulating cryptocurrencies in April before the Financial Services Committee [FSC], Gensler maintained his firm position and even sidestepped the topic of whether ETH is security. The recent XRP ruling opens the possibility that other cryptocurrencies, including Ethereum, may soon be treated similarly to XRP.
Another major obstacle that remains is the process through which the other cryptocurrencies’ initial offerings were made. Those remaining assets would likely pass the Howey Test and be categorized as securities if initial allocations involved selling coins or tokens directly to the general public.
Meanwhile, the blockchain firm Ripple Labs would still have to explain the $1.3 billion it raised in 2013 to promote XRP and onboard firms and partners, even though the token sale to the public through exchanges is now outside the SEC’s oversight.