Grayscale Says SEC’s Reg Crypto Will Drive Value To Ethereum, Solana and BNB Chain

Asset manager Grayscale has forecasted the US SEC’s proposed Regulation Crypto Assets (Reg Crypto) will revive token-based fundraising in the US. The asset manager tipped the proposed rules to drive more activity toward the Ethereum, Solana, and BNB Chain blockchains.

Ethereum, Solana, BNB Chain to become the biggest winners of Reg Crypto, says Grayscale

Grayscale has tipped a trio of blockchains to ride the tailwind of the US SEC’s proposed crypto rules. In a research note, Grayscale Head of Research Zach Pandl opined that Solana, BNB Chain and Ethereum will attract more ecosystem activity to their platforms as a direct result of the SEC rules.

The US SEC proposed Reg Crypto on August 18 as a framework for entrepreneurs to raise capital through newly issued crypto assets, rather than tokenizing existing stocks. Token-based fundraising is not new to crypto, rising to prominence during the initial coin offering boom of 2017 and 2018. 

However, regulatory uncertainty pushed much of the token-based fundraising activity outside the US while activity levels tanked from their peak. The SEC’s Reg Crypto seeks to create a domestic pathway for token-based fundraising.

Source: Grayscale

Right off the bat, the SEC’s proposal includes a startup exemption allowing eligible issuers to raise up to $5 million over four years and a broader fundraising exemption allowing up to $75 million in 12 months. According to Grayscale, if Reg Crypto comes into effect, US companies will lean on public blockchain networks to issue tokens, increasing network activity for leading chains.

“If permitted within the US financial system, growth in token-based fundraising may drive value to blockchain networks like Ethereum, Solana, and BNB Chain,” said Pandl.

A gale of tailwinds for the trio of blockchains

A close look at Ethereum, Solana, and BNB Chain reveals several features that put them in pole position to capture the upside from the SEC’s Reg Crypto. 

For starters, Ethereum currently holds the deepest developer and DeFi ecosystem, with established infrastructure for issuing and trading tokens. Furthermore, the network is positioning itself as the de-facto institutional-grade settlement layer.

Meanwhile, Solana’s high-throughput and low-cost transactions could make it attractive for large numbers of token launches and retail participation. BNB Chain’s strong exchange and retail distribution through the Binance ecosystem, offers new tokens an immediate user and liquidity base.

A US regulatory framework will push token-fundraising activity to established chains with mature infrastructure rather than obscure networks. Ethereum, Solana, and BNB Chain collectively hold more than $50 billion in DeFi TVL while their combined market capitalization sits at over $350 billion.