Ether and altcoin price outlook is positive after SEC investigation ends.

Regulators have backed Ether (for now), which many observers believe could give the asset a boost.

In the year On June 19, 2024, the United States Securities and Exchange Commission (SEC) officially closed its investigation into whether Ether (ETH) should be classified as a security.

Consensus attorney Laura Brookover says crypto markets “will no longer see protests from the SEC, ETH is a security.”

However, Carol Goforth, a professor at Arkansas Law School who specializes in trade unions and securities regulation, told Cointelegraph, “The decision is that the SEC will not proceed with the investigation at this time. This is not a final decision.

Consensys believes that the SEC's withdrawal from the investigation of Ethereum has removed a heavy burden that threatens the existence of the network.

The “dramatic” SEC retreat has settled the dust from negative regulatory concerns regarding ETH as a security, but how will ETH's price react when it has a clearer path? The SEC investigation also hit cryptocurrencies that have similar features to Ethereum, so which altcoins could benefit from Ethereum's exemption?

Observers say that the price of Ether is set to rise

The price of Ether has been relatively stable since the SEC closed its investigation, following the horizontal pattern that continued since the news of the Spot Ether ETF approval on May 23rd.

Ether is down 2% at press time. This has led some traders to wonder if ETH is on the rise and the altcoin market will follow.

Other market observers say there is great potential for future growth.

Conor O'Neill, community leader and partner at investment analysis firm Blockcircle, told Cointelegraph that the “main regulatory hurdle” for Ethereum has been removed and is “a great example for global regulators.”

The SEC closed the investigation, saying it “removes significant risk and uncertainty for any investor.” O'Neill believes that the price of Ethereum is going to rise:

“It is difficult to see any kind of situation that prevents the price of Ethereum from increasing significantly from its current level.”

There are other factors to consider.

The expected launch of spot ether exchanges on July 2nd will undoubtedly affect the price of ETH. Traditional markets are expected to begin pouring capital into ETFs as US-based spot bitcoin (BTC) ETFs launch in January, producing high demand for ETH and driving up its price.

O'Neill explained that the ETH ETF “has the potential to have a long-term positive impact on the price of Ethereum.”

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In the short term, he said, “we will see a sell-on-the-news phenomenon similar to what we saw when Bitcoin ETFs were approved. He said that some of this news should be expected for a short-term return as ETFs are priced at the start of trading.

Although the approval of the ETH ETF is positive news for the crypto markets, Blockchain partner highlighted that the SEC has approved the Ether ETF under certain conditions.

ETF issuers cannot offer Ether ETFs with staking. Goforth says this is because “the SEC charged that self-hedging involved an investment contract, eliminating the opportunity to provide additional returns to shareholders.”

O'Neill believes that if the SEC adheres to strict regulatory controls on digital assets, it will affect the long-term performance of ETH as an institutional asset and, therefore, negatively affect its value.

Some have questioned whether the exit of grayscale, like the Bitcoin ETF, could affect the price of Ether. Its grayscale Ethereum trust, which is worth more than $10 billion, may begin to see major flows after the launch of the ETH ETF. This could affect the price of ETH as it did for Bitcoin.

O'Neill explained that Grayscale's inflows into the new Bitcoin ETFs will significantly outpace revenue because they have high management fees.

However, he highlighted that Greyscale's fees for Ether Trust have been reduced to a level comparable to other Ether ETF providers.

In his opinion, this indicates that Grayscale does not want to repeat the launch of the Bitcoin ETF and believes that the amount of ETH held by Grayscale “could increase significantly when the ETF launches.”

O'Neill predicts that ETH “will follow a similar trajectory to Bitcoin's price, with a dip and then a sharp rise.”

However, he pointed to one central difference between the Ether ETF and the Bitcoin ETF: the surprise effect of the sudden approval.

“Given that many market analysts did not expect Ethereum to be approved, there may be reason to suggest that Ethereum's price has been suppressed. This supports a strong case for Ethereum's price to outperform Bitcoin.”

Ether's price has a clear path forward as one of the main opposing fundamental arguments has been removed. If ETH rises, will altcoins follow?

Altcoin prices can benefit indirectly

When the value of Bitcoin increases, it creates a lifting effect for the entire crypto market. Similarly, this happens in the altcoin market when ether increases.

So which altcoins can you benefit from following the latest news?

The SEC's termination of its investigation could be relevant to other altcoins that the agency has accused of being securities.

The SEC has opened cases against crypto exchanges Binance and Coinbase for various securities law violations. The SEC has designated several altcoins as securities, including Solana's (SOL), Cardano's (ADA), and Polygon's (MATIC).

O'Neill believes that projects from the decentralized finance (DeFi) sector, such as Aave or Chainlink, or layer-2 chains such as Arbitrum, Optimism or Base, could benefit from the SEC retreat.

Related: SEC Drops Ethereum Probe to Avoid ‘Embarrassing' Court Case

However, O'Neill said many offer winning capabilities and are not yet completely immune from SEC scrutiny.

As the United States presidential election approaches, the position of the SEC may change significantly, Donald Trump supports pro-crypto measures.

SEC Chairman Gary Gensler's future remains uncertain, as does the regulatory agency's opposition to divestment of shares. In fact, some speculate that altcoin ETFs may be available on the market.

The sudden approval of spot ether ETFs, the growing number of ETF issuers, and the emergence of an SEC investigation indicate that there may be a change in the SEC's approach. These changes mark a pivotal moment for Ethereum and the broader cryptocurrency market.