People love rumors. Traders love them even more. They are interesting but seldom right. Though who cares if they bring profits?
Cryptocurrencies surged on Tuesday amid rumors about the U.S. Securities and Exchange Commission’s decisions on spot Ethereum exchange-traded fund applications, with the first decision expected this week.
Following the rumors, ETHUSD soared to $3,700. Meanwhile, Bitcoin gained 2% and was trading at about $71,350, extending a 7% gain from the previous day.
The flagship cryptocurrency has been rising since last week’s April CPI report showed inflation eased from the previous month, potentially opening the door to rate cuts in the U.S. This week’s rally pushed Bitcoin’s price above $70,000 for the first time in more than a month.
Back to the main point: the news echoed across the global crypto market, sending Ethereum prices up more than 22% in just a few hours. According to a report by crypto media outlet Coindesk, exchanges are preparing for the new crypto product and have been asked to update their 19b-4 filings, which need to be refreshed whenever a rule change is imminent. However, approval is not guaranteed, sources say.
A spokesperson for the SEC said the agency does not comment on individual filings. An Ethereum ETF approval could end the current lull in crypto, which some investors and analysts expected to last another three to five months.
The SEC’s investigation into whether Ethereum qualifies as a security adds complexity. This investigation, launched after Ethereum transitioned from a proof-of-work to a proof-of-stake consensus mechanism, could influence the SEC’s final decision.
ETFs awaiting approval include those from VanEck, ARK 21Shares, Hashdex, Grayscale, Invesco Galaxy, Fidelity, Franklin, and Bitwise. These applications have encountered multiple delays, but the recent push for revised filings indicates a potential breakthrough.
The SEC’s cautious approach is driven by concerns over market manipulation and the need for comprehensive market data on Ethereum. It took 11 years for the SEC to approve a decision regarding Bitcoin, the only cryptocurrency with genuine spot ETFs – investment vehicles that hold the actual asset, unlike futures-based ETFs that hold futures contracts. We might have to wait a bit longer.
While not guaranteed, the entire digital asset market had a day of celebration. The volatile market added 7.5% to its market cap, topping $2.6 trillion. Trading volumes picked up big time with a 130% increase to $133 billion in value exchanged in 24 hours.
