According to a recent report from Bernstein, the approval of a spot Ethereum (ETH) exchange-traded fund (ETF) in the US could serve as a precedent for classifying Solana (SOL) as a commodity.

The categorization of cryptocurrencies as either securities or commodities carries substantial implications. Designating a commodity status facilitates ETF applications and approvals, while classifying assets as securities subjects them to stricter oversight by the SEC.

The Potential Impact of Ethereum ETF Approval

The approval of spot Ethereum ETFs would indicate that the SEC regards the second-largest cryptocurrency as a commodity, establishing a significant precedent. This would be the first instance of a non-Bitcoin digital asset receiving such classification, heightening expectations for Solana to follow suit.

Ether's price saw an uptick earlier this week after Bloomberg analysts increased the likelihood of SEC approval for spot Ether ETFs from 25% to 75%, following reports of the regulator seeking updates to filings. Final decisions from the SEC on these applications are anticipated later today, May 23, following several postponements.

Bernstein's report suggested that Bitcoin's 75% surge following the approval of spot ETFs hints at similar price movements for Ethereum post-approval.

However, CryptoQuant research indicates that if the SEC were to reject the applications, Ethereum could witness significant volatility and a sharp price correction in the days ahead.

Optimistic Views on Solana

Crypto investor Brian Kelly shared optimistic sentiments about Solana and the potential regulatory approval of Ethereum ETF products during a recent CNBC interview. He speculated that SOL could be the next altcoin to secure ETF approval, considering it a likely candidate for investment managers to advocate for.

Kelly identified Bitcoin, Ethereum, and Solana as the "big three" digital assets that may see ETF products approved in this cycle. He noted the success of Bitcoin ETFs, which collectively hold a substantial amount of Bitcoin valued at around $58 billion, indicating robust demand for regulated crypto investment products.

However, Kelly acknowledged some skepticism within the Solana community, citing Solana's initial coin offering (ICO) and its classification as a security by the SEC as potential obstacles to ETF approval.

Nevertheless, Kelly remained optimistic that the evolving regulatory and political landscape could bolster the chances of Solana ETF approval if Ethereum ETFs receive regulatory clearance.

Changing Regulatory Landscape

The Bernstein report, released ahead of the SEC's final decisions on ETH ETF applications, also highlighted a potential shift in the Biden administration's stance on cryptocurrencies based on recent developments.

Additionally, the report suggested that if Trump were to be reelected, his administration would likely further support the crypto industry through legislative and regulatory measures, potentially leading to significant structural changes in crypto financial integration.

The prospective approval of Solana ETFs coincides with a shifting regulatory environment and increasing bipartisan support for crypto. The recent passage of the Financial Innovation and Technology for the 21st Century (FIT21) Act by the House, with notable Democratic support, indicates a possible political shift.

Lawyer Jake Chervinsky described the bill's passage as a "vote of no confidence" in the SEC's current approach to crypto regulation, implying potential political repercussions for maintaining an anti-crypto stance.

The approval of Solana ETFs would represent a significant milestone for the crypto industry, signaling mainstream acceptance and integration. However, with Ether ETFs still awaiting approval, the industry remains cautiously optimistic about the future.