Amid concerns over the outcome of applications for U.S. spot exchange-traded funds that track the second-biggest cryptocurrency globally, ether was poised for its best two-day rise in almost two years on Tuesday. Meanwhile, bitcoin was getting close to a record high.
After rising 13.8% on Monday, ether, the currency that powers the ethereum blockchain network, was up 8% for the day to $3,775, its highest level in two months.
The leading cryptocurrency, bitcoin, was up 2.2% at $71,000 as of late, some 4% behind its top of $73,803.25, which it reached in March.
This week, the U.S. markets watchdog will rule on a few spot ether ETF applications. Analysts and investors suggested that the unsubstantiated rumors that the U.S. Securities and Exchange Commission would approve these products—which investors had previously believed would be rejected—were the cause of Tuesday’s spike.
Following the SEC’s approval a number of spot bitcoin ETFs, which have attracted inflows totaling billions of dollars, the price of bitcoin spiked earlier this year.
Bitcoin has increased in value by 67% so far in 2024, but ether has already climbed by 60%.
Ben Laidler, global markets strategist at eToro, stated, referencing ether’s market ticker, “Ethereum has taken pole position in the latest crypto rally ahead of Thursday’s first final SEC deadline to decide on an ETH ETF.”
“Outright approval is a long shot, but any guidance on a pathway to eventual acceptance would be a big step forward.”
The SEC has received applications to offer spot ether ETFs from VanEck, ARK Investment Management, and seven more issuers. The filings from VanEck and ARK, which are first in line, must be decided by the SEC by May 23 and May 24, respectively.
The SEC had requested that exchanges that would offer the ether ETF revise their files, according to sources quoted by Joseph Edwards, head of research at Enigma Securities. Separate Bloomberg ETF research also revealed that experts had increased their informal probability of approval.
According to an SEC spokesman, the agency does not comment on specific filings.
“Opposing the ETH ETF after the BTC one was approved always seemed like an odd case for the SEC to try to push, unless they were willing to open up questions on Ethereum’s securities status more broadly, and it’s likely that the call has come in somewhere to not take that fight,” Edwards stated.
Last week, news indicating a slowing in U.S. inflation propelled a rally in riskier assets, which in turn pushed another leg higher in cryptocurrency markets.
