A crypto analyst has made a rather cryptic prediction, suggesting that the by the United States Securities and Exchange Commission (SEC) could unleash a new wave of “animal spirits.” This term in crypto is often used to describe an irrational exuberance and optimism that fuels financial markets.
Ethereum Spot ETF To Reignite Animal Spirits
In an X (formerly Twitter) on May 22, a crypto analyst identified as “the DeFi Villain,” made a bold forecast, anticipating the resurgence of the following the SEC’s approval of Ethereum Spot ETF. The analyst revealed that the approval could let loose “animal spirits,” driving renewed demand and positive sentiment in the market and possibly resulting in a bull market.
The analyst outlined a long list of altcoins that outperformed and experienced remarkable rallies in 2021. These rallies propelled each of their market capitalizations from mere hundreds of millions to billions in the span of a few days and months.
Among the cryptocurrencies highlighted by DeFi Villain, some notable altcoins recorded a massive rise in market capitalization, including , THORChain (RUNE), Filecoin (FIL), Binance Coin (BNB), Axie Infinity (AXS), Shiba Inu (SHIB), and others.
According to the crypto analyst, Dogecoin witnessed a 10x increase in one day, in January 2021. While RUNE market capitalization surged from $200 million to $5 billion in just five months.
One of the most remarkable increases was seen in Filecoin which almost reached the current . The cryptocurrency had jumped close to a whopping $400 billion during the altcoin bull run in 2021.
Other cryptocurrencies like AXS surged from a market capitalization of $200 million to $10 billion, with its Fully Diluted Value (FDV) topping $43 billion at some point. Additionally, Binance Coin, which was already worth $6 billion in early 2021 and among the top 20 cryptocurrencies, had witnessed a mega 8x pump in 20 days, reaching a staggering $50 billion in February 2021.
Even popular meme coins like Shiba Inu (SHIB) had rallied hard, jumping from $4 billion to $40 billion in less than a month. Ethereum Cash (ETC) also saw its market capitalization rise from $600 million to $17 billion in five months.
These massive surges during the underscore the potential altcoins have on the crypto market and how insane they can surge once the altcoin season hits and the dominance for Bitcoin shifts to lesser cryptocurrencies.
DeFi Villain has that the final leg for is likely going to be “Vertical and Brutal,” suggesting that these volatile cryptocurrencies could have another powerful rally to new highs this market cycle.
ETF Approval Nullifies SEC’s Previous Security Claims?
Over the past few months, the has made claims implying that Ethereum, the second largest cryptocurrency, was . However following the authorization of Ethereum Spot ETFs, the SEC has finally recognized Ethereum as a non-security.
Calling the regulator out on this , Paul Grewal, Chief Legal Officer (CLO) of Coinbase that if Ethereum which lacks “contractual agreement or undertaking,” is no longer considered a security by the SEC, then Bitcoin (BTC), which operates similarly without the above agreements, should also be a non-security.
Grewal posed a compelling question regarding the classification of 12 other cryptocurrencies, which can be compared to Ethereum and Bitcoin in terms of their non-security treatment by the SEC. The Coinbase CLO disclosed that the implications that these 12 other cryptocurrencies are considered despite also lacking contractual agreement or undertaking raises the question about the SEC’s possible lack of regulatory clarity and .
