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Ether, the second-largest cryptocurrency, is experiencing its largest two-day gain in nearly two years, driven by speculation about the potential approval of U.S. spot exchange-traded funds (ETFs) that track its performance.
On Tuesday, Ether was up 4.4% at $3,650, following a 13.7% jump the previous day. Meanwhile, Bitcoin, the leading cryptocurrency, rose 2% to $70,850, approaching its record high.
Speculation on SEC Approvals:
The surge in Ether’s price is attributed to unconfirmed reports suggesting that the U.S. Securities and Exchange Commission (SEC) might approve several spot Ether ETF applications.
This comes after earlier expectations that these applications would be rejected. The SEC’s decisions on VanEck’s and ARK Investment Management’s filings are anticipated by May 23 and May 24, respectively.
Impact of ETF Approvals:
Earlier in the year, Bitcoin experienced a sharp rally after the SEC approved several spot Bitcoin ETFs, leading to billions of dollars in inflows. This has set a precedent, boosting investor optimism regarding potential approvals for Ether ETFs.
Analysts believe that even if outright approval is unlikely, any positive guidance from the SEC could significantly impact the market.
Market Reactions and Analyst Insights:
Ben Laidler, a global markets strategist at eToro, highlighted that Ethereum has become a focal point in the latest crypto rally, particularly ahead of the SEC’s impending decisions on Ether ETFs.
Joseph Edwards, head of research at Enigma Securities, noted that reports of the SEC asking exchanges to update their filings for Ether ETFs have increased the perceived likelihood of approval.
Broader Market Context:
The cryptocurrency market has been buoyed by broader economic factors as well. Last week, a rally in risk assets, including cryptocurrencies, was driven by data indicating a slowdown in U.S. inflation. This environment has further bolstered the recent gains in both Bitcoin and Ether.
