A recent pivot by the Securities and Exchange Commission (SEC) and the Biden administration regarding the approval of an Ethereum ETF (Exchange-Traded Fund) has the crypto community buzzing. On Wednesday, speculation suddenly started whirling that an ETH ETF, which many saw as an extreme long shot, was rapidly becoming a sure thing.

The shift comes amid a broader regulatory landscape in which pro-crypto Americans feel adversarial towards Gary Gensler’s SEC and anti-crypto Democrats. This rivalry includes the contentious FIT21 Act, which aims to clarify the regulatory framework for cryptocurrencies and digital assets. A surprisingly bipartisan vote to approve FIT21 sent the rumor mill churning.

Have Democrats Actually Changed Their Minds?

Cryptocurrency enthusiasts and libertarians are mostly positive about the SEC's pivot from decidedly against crypto to sparking rumors an ETH ETF is imminent. This group has long advocated for the mainstream acceptance of digital assets, viewing the potential approval of an Ethereum ETF as a step towards legitimizing cryptocurrencies.

However, most remain skeptical that recent wind changes come from genuine support for crypto. They voice suspicions that Democratic politicians rather seek to avoid upsetting voters prior to the 2024 election.

Banks May Own Politicians

Many people praise the FIT21 Act and criticize regulatory figures like SEC Chair Gary Gensler. They perceive his outspoken opposition to FIT21 as an attempt to stifle innovation and pander to banks. Some even view the SEC and Biden administration’s newfound acceptance of crypto as an indication they are receiving pressure from banks. There is speculation that banks want to participate in crypto gains – and that politicians respond more to banks than voters.

Voters May Make Themselves Known

Others highlight the importance of crypto in the upcoming presidential election. Instead of pressure from banks interested in joining the crypto upside, this group believes crypto voters could be a decisive factor for Biden's campaign. This is especially true as the president continues to hemorrhage support from pro-Palestine Democrats and blue-collar Americans.

• Wednesday’s rumors Gensler would approve an Ethereum ETF likely account for his brief bump in approval over the last few days.
• Gensler’s approval reached a high of 53% as conversations gained steam about bipartisan votes and the possible ETF approval.

Partisan Views of the Issue

Many see recent shifts as a rebuke of what they perceive as overreach by regulatory agencies under the Biden administration. Comments from GOP figures and their supporters often frame the issue in terms of economic freedom and innovation. The enthusiastic support from Republicans reflects a broader GOP strategy to position themselves as champions of financial innovation and deregulation.

Progressive and Democratic voters tend to be more critical of the SEC's new position and the FIT21 Act. They echo concerns raised by SEC Chair Gensler about potential regulatory loopholes and undermining investor protections.

Financial industry professionals and analysts have a mixed but generally cautious perspective. They recognize the potential benefits of a regulated Ethereum ETF but are also mindful of the complexities involved in integrating cryptocurrencies into the traditional financial system.

Biden Admin and Crypto

The relationship between American crypto holders and the Biden administration has been fraught with tension. The prevailing sentiment towards Biden and Democrats is overwhelmingly negative. Crypto enthusiasts on the left and the right express frustration and anger, perceiving the administration's stance as overly restrictive.

Many crypto holders feel the administration, through Gary Gensler's leadership at the SEC, is creating unwarranted roadblocks. There is a palpable desire among crypto holders for a change in leadership at the SEC. His stance is often described as anachronistic, with critics arguing existing securities laws, which are nearly a century old, need updating.

Recent bipartisan votes suggest discontent with Democratic crypto policies is not confined to a single political ideology but spans across the political spectrum.

Playing Catchup with Crypto Voters

Many suspect President Biden is shifting his stance on crypto to accommodate younger voters – who largely disapprove of him. With broader political shift towards more crypto-friendly regulations, people attribute this to an attempt to win over voters.

The administration's perceived hostility towards crypto is increasingly viewed as a contributing factor to his disapproval. Especially given the high level of engagement with digital assets among younger demographics.

In addition, political figures like former President Donald Trump, have begun to embrace crypto more openly. Trump's campaign even accepts crypto donations. This move, which is perceived as an attempt to appeal to the crypto community, seems to be welcomed.

Despite some expressing skepticism that Trump truly embraces crypto, most seem willing to believe he won’t actively fight against it. The Biden administration, by contrast, continues to solidify its reputation of being antagonistic towards crypto holders. It remains to be seen whether voters will accept a pro-crypto pivot from Biden as readily as they have from Trump.