By Tom Blitzer
Key Insights
- Bitcoin surged past $71K, and Ether rose 19% due to growing optimism about the SEC’s potential approval of an Ether ETF.
- Major cryptocurrencies saw gains, and $260M in short positions were liquidated, highlighting market volatility.
- The SEC’s actions on Ether ETF filings drove trading activity, and Ether’s potential approval was seen as a major bullish signal.
Bitcoin (BTC) reached a milestone early Tuesday, surging past $71,000, its highest level since early April. This rise follows increased optimism surrounding the potential approval of a spot Ether (ETH) exchange-traded fund (ETF) in the United States. Ether also saw a substantial price increase, climbing over 19% to $3,700.
Major Cryptocurrencies See Gains
Alongside Bitcoin and Ether, other major cryptocurrencies experienced modest gains. According to data from CoinGecko, XRP, Cardano’s ADA, Solana’s SOL, and Dogecoin (DOGE) saw increases between 3% and 6%. Heightened expectations for regulatory approval of the Ether ETF largely drove this broad market uplift.
The surge in cryptocurrency prices led to liquidations across the market. Over $260 million in short positions were liquidated, marking the largest such event since February 28. According to Coinglass data, Ethereum shorts accounted for over $115 million of these liquidations, while Bitcoin shorts contributed just over $99 million. Binance recorded the highest amount of liquidations among exchanges, with over $130 million, followed by OKX at $118 million and Huobi at $51 million.
SEC’s Regulatory Moves Boost Market Sentiment
The rally in cryptocurrency prices began late Monday after Bloomberg analysts Eric Balchunas and James Seyffart increased the probability of a spot Ether ETF approval to 75%, up from an earlier estimate of 20%. This optimism was fueled by reports that the U.S. Securities and Exchange Commission (SEC) had asked exchanges aspiring to offer Ether ETFs to update their 19b-4 filings ahead of a key deadline.
Market participants view the approval of an Ether ETF as a bullish signal, potentially attracting institutional capital into the market. The spot Bitcoin ETF, which began trading in January, has already seen $12 billion in total inflows, with notable participation from top trading firms and state funds. This precedent has led traders to anticipate similar success for an Ether ETF.
Market Reactions and Future Projections
Singapore-based QCP Capital noted that the market’s current sentiment suggests a further increase in Ether prices. In a broadcast on Tuesday, the firm stated,
“Our view is that spot cannot settle here, with approval moving us closer to 4k and denial back to 3k.”
Moreover, this statement reflects the broader market belief that the outcome of the SEC’s decision will significantly influence Ether’s price trajectory.
As of press time, Bitcoin prices stood at $70,882, representing a 6.5% increase in the past 24 hours, according to CoinMarketCap data. Bitcoin’s market capitalization reached approximately $1.405 trillion, with a 24-hour trading volume of $52.06 billion.
Similarly, Ether was trading at $3,655, with a market capitalization of $442.66 billion and a 24-hour trading volume of $36.30 billion. These figures underscore the trading activity and investor interest in these leading cryptocurrencies.
BTC Vs. ETH 1-day price chart (Source: CoinMarketCap)
Anticipation Surrounding the Ether ETF Deadline
The primary driver behind the recent rise in Ether’s price is the impending SEC deadline for the Ethereum ETF, which falls on May 23. Analysts had previously given low odds for the approval of an Ether ETF, but the SEC’s recent actions have dramatically shifted market expectations. The directive for exchanges to update their regulatory filings suggests a positive move toward approval, which has energized the market.
Despite the optimism, some analysts caution that an immediate approval is still uncertain. The SEC’s actions, however, indicate a potentially favorable outlook, which has been enough to trigger substantial market movements.
This market response highlights the critical role regulatory developments play in the cryptocurrency space. Approval of an Ether ETF could pave the way for more institutional investment, further legitimizing the asset class and potentially driving prices higher.