What Is the Significance of the “Expectation of Profit” in the Howey Test?

The "expectation of profit" prong requires that the investor's primary motivation for the investment is the financial return, not the consumption or use of the asset. This is judged objectively, considering the offering's economic realities, promotional materials, and market perception.

If the ICO is marketed as an investment opportunity with potential appreciation, this prong is easily satisfied. It is a critical differentiator between a consumer purchase (utility) and a security investment.