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Etherreum Surges 20% Amid Hopes for ETF Approval; Bitcoin Also Rises
Cryptocurrencies experienced significant gains on Tuesday, spurred by a surge in optimism regarding the U.S. Securities and Exchange Commission’s upcoming decisions on spot ether exchange-traded funds (ETFs), with the first decision expected this week.
Ether led the advance, climbing 12% to $3,785.42, after an impressive 20% increase on Monday, according to Coin Metrics data. “This sudden shift in expectations comes as a welcome surprise for investors seeking momentum post-Bitcoin halving and following the launch of Bitcoin ETFs in the U.S. and Hong Kong,” noted Antoni Trenchev, co-founder and managing partner at Nexo. He added, “Approval of spot ETH ETFs could catalyze a broader altcoin rally, with ether typically setting the pace for the crypto market.”
Meanwhile, Bitcoin saw a 2% increase, reaching about $71,350, building on a 7% rise from the previous day. The leading cryptocurrency has been on an upward trajectory since the latest CPI reading indicated a decrease in inflation last month, potentially setting the stage for rate cuts in the U.S. This rally pushed Bitcoin’s price above $70,000 for the first time in over a month.
Crypto-related stocks also benefited from the market’s upbeat mood. Trading platforms such as Coinbase and Robinhood saw about a 2% increase in premarket trading, adding to Monday’s gains of 8% and 9%, respectively. MicroStrategy, often seen as a proxy for Bitcoin’s price, rose by 1%. Bitcoin mining companies like Riot Platforms and Iren (formerly Iris Energy) advanced by 2%, while Marathon Digital and CleanSpark each increased by 1%.
The market’s optimistic turn began abruptly on Monday amid reports that the SEC has been actively seeking updates to key documents from ETF issuers and exchanges. Despite this, an SEC spokesperson stated that the agency does not comment on specific filings.
Investors are now reassessing the probability of the SEC approving the spot ether ETF applications. Previously, the consensus was that approval was unlikely given the SEC’s minimal interaction on the filings. However, the situation appeared different in the weeks leading up to the Bitcoin ETF approvals, where the SEC was reportedly more engaged with fund issuers.
Decisions on applications from VanEck and Ark Invest are expected this Thursday and Friday, respectively, with other major players like BlackRock, Fidelity, Invesco, Grayscale, and Bitwise Asset Management also awaiting decisions later this year.
According to Trenchev, an approval for an Ethereum ETF could revitalize the crypto market, which many investors and analysts had anticipated might remain stagnant for another three to five months. “Crypto has been dormant since March, and we’re still in a holding pattern. A breakthrough in Bitcoin’s record high is needed to definitively break out of this range,” he explained.
Trenchev cautioned, “Bitcoin might follow Ethereum’s lead if we see an ETF approval, but we should temper our expectations. One month does not make a season. We are in a data-driven market, and factors like a hot CPI number or a strong jobs report could prolong the current stagnation.”
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