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Cryptocurrencies rose Tuesday amid a late surge in optimism around the U.S. Securities and Exchange Commission’s decisions on spot ether exchange-traded funds applications, the first of which is due this week.
Ether led the rally, rising 11% to $3,744.43, according to Coin Metrics, after rocketing 20% on Monday.
Meanwhile, bitcoin added 2% and was trading at about $71,350, extending an 7% gain from the previous day. The flagship cryptocurrency has been rising since last week’s April CPI reading showed inflation eased from the previous month, which could open the door again to rate cuts in the U.S. This week’s rally has pushed bitcoin above $70,000 for the first time in more than a month.
Ether rallies on ETF optimism
Crypto-related equities rode the wave. Coinbase and Robinhood each rose about 2% in premarket trading, adding to Monday’s gains of 8% and 9%, respectively. MicroStrategy, a proxy for the bitcoin price, added 1%. Bitcoin miners also gained slightly, with Riot Platforms and Iren (formerly known as Iris Energy) each advancing 2%, and Marathon Digital and CleanSpark each ticking higher by 1%.
Investors are reconsidering the probability that the SEC greenlights spot ether ETF applications amid reports that the SEC has requested key document updates from potential ETF issuers and exchanges. The previous consensus was that such funds would likely not be approved, based on a lack of engagement from the agency on the filings.
A spokesperson for the SEC said the agency doesn’t comment on individual filings.
Final decisions on applications by VanEck and Ark Invest are due this Thursday and Friday, respectively.
BlackRock, Fidelity, Invesco, Grayscale and Bitwise Asset Management also have applications awaiting decisions this year.
An Ethereum ETF approval could put an end to the lull in crypto, according to Antoni Trenchev, co-founder and managing partner of Nexo – which several investors and analysts had expected to last another three to five months.
“Crypto’s been in a slumber since March, and we’re still in that sideways space,” Trenchev said. “We need [bitcoin] to break through the record high before we can say categorically that we’ve broken out of the range.”
“Bitcoin should rise on the coat-tails of Ethereum if we get an approval, but let’s not get too far ahead of ourselves,” he added. “One month doesn’t make a summer. We’re in a data-centric market. If we get a hot CPI number or a really strong jobs report, you could see the lull continue.”
