The CFTC says Ethereum is a commodity.

The SEC says it’s a security.

I don’t think this issue is going to be resolved any time soon.

Congress is split, so the current “regulation by enforcement” regime is likely to continue.

Especially after Coinbase -- a bonafide good actor in this space -- received a Wells notice from the SEC, which is a signal to the industry that more enforcement action is coming.

And yet…

You wouldn’t guess it by looking at the crypto markets. Bitcoin is up 11% this week and 33% in the past two weeks.

So is the bull market on? I personally don’t trust it.

The pulse is erratic. There’s far more noise than there are signals.

And one major worry is that Ethereum is about to suffer a massive sell-off -- an ETHpocalypse.

Let’s explore that.

How Bulls Begin

Again, crypto is looking strong on the surface.

So far this year we’ve seen Bitcoin jump from $16,000 to $28,000.

This is usually how bull markets begin.

First, Bitcoin goes on a run, raising Bitcoin dominance over Ethereum. Then Bitcoin stabilizes and money flows into Ethereum. Ethereum then runs up, creates a floor, and money flows to altcoins, which see a huge jump.

That’s the framework many crypto traders use to try to time the market. Sometimes it works. Most of the time, it’s not nearly as clearcut.

And today, there are far too many wild cards at play to count on it. An uncertain regulatory environment is just one of them.

Take, for example, the Shanghai Update, for which we now have a set date: April 12. That’s less than three weeks from now.

Put simply, that’s when tons of staked Ethereum gets unlocked.

At the moment, about 17.5 million ETH are locked -- more than $25 BILLION worth.

Some crypto pundits have warned that, given the selling pressure, this will crash Ethereum, triggering the…

ETHpocalypse

Sounds scary, but consider what they don’t say:

A.] 57% of those holders have had the chance to sell for over a year (through liquid staking protocols). And they didn’t.

B.] Only about 32% of the locked Ethereum is in profit. The rest were bought when ETH was above $2,000.

C.] Contrary to popular thought, not all Ethereum will unlock all at once. The unlock will be gradual.

This is far from an ETHpocalypse.

Bigger Things At Play

In all, the Shanghai Update is likely to be a nothingburger.

We suspect that there might be a small sell-off, but will be far from apocalyptic for Ethereum.

And the narratives forming around crypto -- bullish and bearish -- are mostly meaningless.

While we remain bullish on the long-term prospects of crypto…

There’s still too much uncertainty to know which way crypto is headed in the short-term.