Brian Kelly, the Founder and CEO of BKCM LLC, explained why Ether (ETH) being considered a security by the U.S. Commodity Futures Trading Commission (CFTC) is positive for the market.
Ethereum As A Commodity Has Huge Implications
A few days ago, UseTheBitcoin reported that Ethereum was considered a security by the CFTC. Heath Tarbert explained in a recent interview with Yahoo Finance’s All Markets Summit in New York City that Ether (ETH) is a commodity.
CNBC’s Fast Money trader, Brian Kelly, talked about what it means for the market the decision taken by the CFTC to consider Ether a commodity.
On the matter, Kelly commented:
“The CFTC saying that Ethereum is a commodity is huge for the space. It gives regulatory clarity […] it opens the doors for institutions to come in. The CFTC said ‘we are not banning it, we are regulating it,’ and now investors can say ‘put it in my commodity bucket.’”
In addition to it, Kelly talked about Ether futures and whether they could eventually be released to the market in the near future.
The SEC just knocked back anther bitcoin ETF. @BKBrianKelly breaks it down. pic.twitter.com/C3OfdhG2ru
— CNBC's Fast Money (@CNBCFastMoney) October 10, 2019
Tarbert has also mentioned that there are going to be Ether futures trading released in the U.S. in the near future. However, he didn’t provide any specific date for this to happen.
At the same time, Kelly explained that his conversations with institutions were related to Bitcoin’s potential as a new digital gold. Bitcoin has been many times compared with gold due to the similarities these two assets have.
Nevertheless, Bitcoin is far from having a similar valuation to gold. Indeed, gold has a market capitalization of over $7 trillion while Bitcoin remains close to $150 billion market capitalization.
Having a more regulated market allows investors to feel protected and operate under clear rules. The cryptocurrency market has been attacked due to the lack of regulations and legal clarity around cryptocurrencies and other digital assets.
While Bitcoin and Ethereum are considered commodities, Initial Coin Offering (ICO) tokens are considered securities by the U.S. Securities and Exchange Commission (SEC). In addition to it, Tarbert mentioned that cryptocurrencies that were created through a hard fork, for example, Bitcoin Cash (BCH) or Ethereum Classic (ETC), are also considered commodities if their previous networks were considered commodities.
In the last year, the U.S. SEC has been issuing enforcement actions against ICOs that released unregistered securities to the market.