Cryptocurrency prices witnessed significant fluctuations on Tuesday as investors reacted to reports suggesting progress towards the approval of spot-Ether exchange-traded funds (ETFs) in the U.S. market. Bitcoin, the largest cryptocurrency by market capitalization, surged by 6.6% in the past 24 hours, reaching $71,349 by 08:47 ET (12:47 GMT). However, it was Ethereum, the second-largest cryptocurrency, that stole the spotlight with a remarkable 22.5% surge, reaching a 1-½ month high of $3,776.1.
The surge in Ether prices followed a report from Coindesk indicating that the U.S. Securities and Exchange Commission (SEC) had requested applicants for spot Ether ETFs to update certain key filings, ahead of a significant deadline for ETF approval later this Thursday. While the report cautioned that the approval of these ETFs was not guaranteed, it marked a noteworthy step towards potential regulatory acceptance.
Analysts from Bloomberg, Eric Balchunas, and James Seyffart, revised their expectations for spot Ether ETF approval, increasing the probability from 25% to 75%. They cited the Coindesk report, suggesting that the SEC might be reconsidering its stance on ETF approval, signifying a possible shift in regulatory sentiment.
The SEC’s previous reluctance towards spot Ether ETFs, particularly amidst ongoing scrutiny over Ether’s classification as a security, had cast doubts on the possibility of approval. However, a potential approval could trigger a similar market rally in Ether as witnessed with Bitcoin earlier in 2024, when institutional investors flocked to ETFs, driving prices to record highs.
Meanwhile, data from CoinShares revealed that crypto investment products experienced a second consecutive week of capital inflows, totaling $932 million in the week ending May 20. This trend was attributed to speculation surrounding potential Federal Reserve interest rate cuts amidst softer U.S. inflation readings. Despite Bitcoin’s continued dominance in capital flows, overall trading volumes remained below levels observed after the approval of spot-Bitcoin ETFs in February and March.
Altcoins mirrored Ether’s gains, with Solana rising by 1.2% and XRP adding 6%. Notably, meme tokens Dogecoin and SHIB recorded notable gains of 10.5% and 8%, respectively.
In other news, House Democrats Maxine Waters and David Scott voiced strong opposition to the Financial Innovation and Technology for the 21st Century Act, commonly known as the crypto bill. While not actively urging members to vote against it, they argued that the bill’s provisions undermined investor protections and created uncertainty in the securities market. They particularly criticized the bill’s safe harbor provision, asserting that it weakened existing securities laws and exposed investors to potential fraud and market manipulation.
