This week is shaping up to be one of the more important ones for crypto, with a slate of decisions coming from lawmakers and regulators that could signal big change for the industry in the U.S.

Why it matters: The crypto crackdown in the country could be showing cracks of its own.

State of play: The House vote on FIT21 is set to begin around 2pm ET today.

• Officially the Financial Innovation and Technology for the 21st Century Act, FIT21 is a broad, market-structure bill sponsored by Rep. Glenn Thompson (R-Pa.).
• It details which regulatory agencies have jurisdiction over certain digital assets and how crypto companies would be able to operate in a compliant way.
• It has bipartisan support in the House, and — while not universally adored by all of crypto land — has backing from major exchanges like Coinbase and Kraken to venture capital shops Andreessen Horowitz and Electric Capital.

Over at the SEC, tomorrow is the deadline for its decision on a spot ether ETF application.

• Until yesterday that decision was widely expected to be a denial, based in large part on the continued threat of enforcement actions against Ethereum-based software makers.

Yes, but: Odds are higher now — and the rumor is that the pivot was political.

• The downside of a possible approval is that there might not actually be much demand for ether ETFs (Read more👇).
• (Even with an approval this week, ether ETFs would require S-1s to go effective before launch.)

Reality check: If President Biden at some point this week sticks to his vow to veto a separate piece of legislation — the House and Senate-passed resolution to overturn SEC cryptocurrency custodial accounting rule SAB 121 — it would blast the political theory to smithereens.

• So we're watching that too.

Elsewhere, former president and likely GOP candidate Donald Trump opened up for crypto campaign donations yesterday.

💭 Our thought bubble: Any positive developments might just push bitcoin to new all-time highs... which is one more thing to keep an eye on.

• The trend of innovative companies moving offshore appears to be abating, with at least one high-profile return.

"The Financial Innovation and Technology for the 21st Century Act ('FIT 21') would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk."

As much as there might be political appetite for ether ETFs, there might not be much of a business case for them right now.

The big picture: There are nine would-be issuers eagerly waiting to see if ether ETFs get approved this week, but Valkyrie is not one of them.

• 👆 That's the shop behind the bitcoin ETF called BRRR.

Behind the scenes: "When everybody started filing their ETH applications, we [polled] a lot of financial advisors, wirehouses, insurance companies, and pensions funds we work with and there's just no appetite for them like there is for bitcoin ETFs," Valkyrie's Steven McClurg said in an interview this morning with Axios.

• Case in point: The October-launched ether futures ETFs haven't been much of a hit, he said.

Zoom in: McClurg says demand in the U.S., especially among advisors, isn't there because of regulatory risk (the outstanding question of whether ether is a security) and because shops just haven't done their homework on it.

• Plus, any retail interest will likely remain diminished because, by the looks of ether ETF applications, staking won't be allowed.

The intrigue: It's not just that ETF shareholders wouldn't be allowed the rewards from staking, but also the fact that the SEC would disallow staking of the underlying custodied ether — period, McClurg said.

• That makes the product less attractive to issuers, too.

Zoom in: Chris Perkins, president of CoinFund, described the slate of proposed ether ETFs as "substandard" in an X spaces call, because of the no-staking element.

• "The beauty of ETH for investors, and this is not investment advice, is that real yield. It actually compares very favorably to traditional rates."
• In Canada, he said, 50% of underlying ether in the ETF is allowed to be staked.

The bottom line: Bloomberg Intelligence analyst James Seyffart on the same X spaces call said he expects ether ETF demand to be about 20% of bitcoin ETF flows. He also called the ether futures ETF launches "a complete flop."

• Valkyrie is even more pessimistic, expecting flows would be less than 10% of what they were for bitcoin.
• "We just don't see the market for 10 issuers, or nine in this case," McClurg said.

💭 Crystal's thought bubble: The ether ETF approval, if it happens, might be a more symbolic victory for crypto, less a market-shattering one.

🦄 Uniswap responded to its Wells notice. (Uniswap)

🇬🇧 WisdomTree received approval to list bitcoin and ether funds on the London Stock Exchange. (CoinDesk)

💟 Social network Farcaster raised $150 million in Series A fundraising, led by Paradigm. (Unchained)

Everything rests on an ether ETF approval... is the joke.

💭 Our thought bubble: It's a riff on this.