The US Securities and Exchange Commission (SEC) is currently conducting an investigation into Ethereum to determine if it qualifies as a security, as per a report by Fortune. The SEC has issued subpoenas to various companies requesting documents and financial records related to their interactions with the Ethereum Foundation, according to sources familiar with the matter. The Ethereum Foundation, responsible for overseeing the governance and development of the Ethereum blockchain, has acknowledged the investigation in an update on its GitHub repository. This scrutiny began following Ethereum's transition from a proof-of-work to a proof-of-stake consensus mechanism in 2022.

Odds of SEC Approval for Ethereum ETF Plummet

The SEC's inquiry into Ethereum coincides with pending applications from BlackRock, Fidelity, and six other entities seeking approval for a spot Ethereum ETF. While the SEC greenlit spot Bitcoin ETFs in January, concerns have been raised by US lawmakers regarding additional crypto ETF approvals. Bloomberg's ETF analyst Eric Balchunas has revised the likelihood of a spot ETH ETF approval down to 25% by the May deadline, down from a 35% chance on March 11. The SEC recently postponed its decision on the VanEck spot Ethereum ETF until May 23. Coinbase's chief legal officer, Paul Grewal, has defended Ether's classification as a commodity and argued against the SEC's basis for potentially rejecting ETH ETF approvals.

Influence of US Data on Cryptocurrency Markets

The performance of cryptocurrencies, including Bitcoin, is notably impacted by data releases from the United States. Historical trends show that Federal Reserve income data and interest rate announcements have previously caused fluctuations in cryptocurrency prices. Furthermore, a stronger US dollar typically results in market downturns for cryptocurrencies due to capital flow redirection away from digital assets. The latest eagerly anticipated data pertains to the US Service PMI figures.

Latest US Data Insights

Recent US Service PMI data revealed an expectation of 52.0 with a previous figure of 52.3, while the latest report unveiled a figure of 51.7. For US Manufacturing PMI, expectations were at 51.8 with a previous figure of 52.2, and the announced figure stood at 52.5. This data holds significance not only for the US economy but also for cryptocurrency markets, with potential implications on future Federal Reserve interest rate decisions.

Impact on Cryptocurrencies

Experts suggest that a robust US economy could trigger market declines, including Bitcoin, due to a strengthening dollar index. Conversely, a weakening US economy might lead to gains in riskier assets like Bitcoin.

Recent Federal Reserve interest rate announcements have stirred both general markets and cryptocurrencies alike. This period is crucial for cryptocurrency markets as speculations point towards heightened volatility following recent economic decisions by central banks like the Central Bank of the Republic of Turkey (CBRT) and the Federal Reserve.