Ether, the cryptocurrency that powers the Ethereum blockchain network, is witnessing its most substantial two-day surge in almost two years, fueled by investor optimism ahead of crucial U.S. regulatory decisions on spot exchange-traded funds (ETFs) linked to the digital currency. As speculation mounts over the approval of these ETFs, Ether’s value soared to $3,775—its highest in two months—marking an 8% increase on the day following a 13.8% jump. Meanwhile, Bitcoin, the leading cryptocurrency, also experienced significant gains, increasing 2.2% to reach $71,000, nearing its March high of $73,803.25.
This week, the U.S. Securities and Exchange Commission (SEC) is expected to deliver its verdict on several pending applications for spot Ether ETFs. The market’s upbeat response comes amid rumors that the SEC might green-light these products, contradicting earlier expectations of a rejection. This optimism is reminiscent of the rally Bitcoin underwent earlier in the year following the SEC’s approval of several Bitcoin spot ETFs, which subsequently attracted billions of dollars in capital inflows.
So far in 2024, Bitcoin has seen a 67% increase, with Ether closely trailing with a 60% rise. “Ethereum is currently leading the charge in the cryptocurrency rally as we approach the SEC’s first decision deadline concerning an ETH ETF,” noted Ben Laidler, global markets strategist at eToro. “While outright approval remains uncertain, any positive feedback or hints towards eventual acceptance could significantly impact the market.”
Prominent firms such as VanEck and ARK Investment Management, along with seven other issuers, have submitted applications to the SEC for listing spot Ether ETFs. The decisions on applications from VanEck and ARK, which are at the forefront, are due by May 23 and May 24, respectively.
Joseph Edwards, head of research at Enigma Securities, highlighted that the SEC has requested updates to the filings from exchanges poised to list the Ether ETFs. Additionally, Bloomberg ETF research indicates that analysts have recently increased their informal approval probabilities. The SEC, maintaining its standard practice, has refrained from commenting on specific filings.
“Following the approval of a Bitcoin ETF, opposing an Ether ETF would pose a regulatory inconsistency, potentially prompting broader inquiries into Ethereum’s classification as a security,” Edwards explained. This week’s market movements also capitalized on recent U.S. inflation data, which showed a slowdown and sparked a broader rally in risk assets, emphasizing the interconnected nature of macroeconomic factors and cryptocurrency valuations.
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