SEC Classifies Bitcoin as Commodity, Paving Way for Altcoin ETFs
The U.S. Securities and Exchange Commission (SEC) has classified proof-of-work (PoW) cryptocurrencies, including Bitcoin, as commodities, not securities. This regulatory change may facilitate the approval of multiple altcoin ETFs by the end of Q2 2025.
Key points from the SEC's announcement:
- Mining activities do not involve offering or selling securities.
- Participants in PoW activities are not required to register with the SEC.
- This classification could extend to altcoins like Litecoin, Monero, and Kaspa.
- The SEC previously indicated that certain meme coins are also non-securities.
Commissioner Caroline Crenshaw expressed concerns about potential loopholes in the ruling, but her dissent is unlikely to hinder the SEC’s current momentum. The SEC has postponed decisions on ETF applications for tokens like Solana and XRP, although the Commodity Futures Trading Commission (CFTC) approved futures trading for these tokens.
Additionally, the SEC dropped its lawsuit against Ripple regarding XRP's security status, indicating a trend towards reducing regulatory obstacles.
Paul Atkins is expected to be confirmed as the new SEC Chair, potentially leading to more favorable conditions for crypto regulations. Analysts predict a large-scale approval of altcoin ETFs once he assumes office.
Despite Crenshaw's warnings about rushing into new classifications, the SEC appears to be moving towards a more accommodating regulatory stance, which may enhance institutional interest in crypto products like ETFs.