Ethereum price rallies above $3.1K after unexpected regulatory victory

Ether (ETH) price rose by 5.5% on May 17, nearing $3,100 for the first time in 10 days. Analysts attributed this rally to a decrease in demand for fixed-income instruments following stagnant United States retail sales data in April. This data increased the market’s expectation of a potential interest rate cut by the U.S. Federal Reserve to boost the economy.

Expansionary measures by the central bank are typically seen as bullish for risk-on markets, whether due to an increased monetary supply or reduced credit costs for businesses and individuals. Investors sought exposure to scarce assets, including cryptocurrencies, leading to gold reaching $2,410, just 0.8% below its all-time high.

A court ruling gave Ether investors a confidence boost

Ether’s surge was also driven by a U.S. Department of Justice indictment unsealed on May 15. The indictment accused two individuals of wire fraud and money laundering by manipulating the Ethereum blockchain. The document stated that “Ethereum is a decentralized blockchain […] without the need for a trusted intermediary” and added, “No central actor runs the Ethereum Network.”

Additionally, the court noted that Ethereum smart contracts enable transactions without a trusted intermediary. These statements boosted Ether investors’ confidence, especially after the U.S. Securities and Exchange Commission issued a Wells notice to the trading platform Robinhood on May 4 over alleged securities violations related to crypto listings and custodian operations.

According to Orlando Cosme, founder and CEO of Lexproof, such a verdict contradicts regulators’ classification of ETH as a security, “as there would be no management or entrepreneurial efforts of others.” While this analysis does not change the approval odds of U.S. spot Ether exchange-traded funds (ETFs), it certainly lifted investors’ spirits.

The U.S. SEC is expected to provide its final ruling on VanEck’s spot Ether ETF request on March 23 and rule on the conversion of Grayscale’s ETHE fund by June 18. Although analysts predict approval odds below 35%, the regulators’ case for classifying Ether as a…

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