Several major cryptocurrencies experienced a surge in value on Tuesday due to increased crypto adoption and speculation surrounding the approval of the first Ethereum-centric exchange-traded funds (ETFs). By the end of the regular trading session, Bitcoin (BTC) saw a 4.5% increase, Ethereum (ETH) gained 1.8%, and Dogecoin (DOGE) climbed by 12.2%.
The surge in Bitcoin's price, surpassing $57,000 for the first time since December 2021, was attributed to substantial inflows into Bitcoin ETFs, with around $2.5 billion entering digital asset investment products last week. The United States Securities and Exchange Commission's (SEC) approval of the first 13 spot Bitcoin ETFs further fueled the crypto rally.
This approval followed months of speculation, with opportunistic traders capitalizing on the broader crypto market rally. ETFs offer a more accessible medium for investors to engage in cryptocurrencies, as they can be bought and sold through regular online brokerages. The SEC's approval of Bitcoin ETFs also signified a vote of confidence in crypto ETFs as a legitimate investment.
Looking ahead, attention has turned to May 23, 2024, the final deadline for the SEC to approve or deny spot Ether ETF applications from various investment management companies. While there are no guarantees, analysts believe the likelihood of an SEC denial is low, considering the precedent set by Bitcoin ETF approvals.
With the May 23 deadline approaching, analysts at Bloomberg and Standard Chartered speculate that anticipation of the first Ether ETFs could lead to a similar extended rally seen before the approval of the first Bitcoin ETFs. The interconnectedness of Ether and Bitcoin prices suggests that the approval of an Ether ETF could follow a similar trajectory to Bitcoin.
While short-term gains based on hype can be unpredictable, the steady flow of billions of dollars into crypto assets suggests growing acceptance as a valid investment. If this trend continues, major cryptocurrencies are expected to see further price increases.