Bitcoin (BTC) has experienced a significant surge, gaining 8.5% within 24 hours to reach $71,926 on May 21. This move places Bitcoin just 2.5% shy of its all-time high. Moreover, BTC derivatives are showing favorable conditions for breaking new all-time highs in the weeks ahead.
The 4% daily jump in BTC price appears to be spurred by growing optimism around the approval odds of a U.S. spot Ethereum exchange-traded fund (ETF) and a general market trend seeking inflation protection. This trend has also propelled gold and the S&P 500 to new all-time highs on May 20.
Many traders wonder whether the recent price surge in Bitcoin was driven by excessive use of leveraged long positions and what the implications of a spot Ether (ETH) ETF are.
Regulator’s stance shifts after U.S. Senate overrule
Senior Bloomberg ETF analyst Eric Balchunas raised the approval odds for the Ethereum spot ETF from 25% to 75% on May 20, influenced by political pressure. This adjustment followed a pivotal May 16 resolution by the U.S. Senate that overturned the SEC’s Bulletin 121, which had imposed stringent capital requirements on banks holding customer digital assets.
Before the Senate’s vote, President Biden had indicated he might use executive power to veto any resolution that would reverse the SEC’s policy.
However, the Senate’s decision favoring cryptocurrency adoption prompted a strategic reevaluation at the White House, according to Perianne Boring, the founder and CEO of the Blockchain Trade Association Digital Chamber.
The SEC’s chair, Gary Gensler, had previously shown considerable reluctance to classify Ethereum as a non-security or to hint at any likelihood of approving its spot ETF.
But the landscape shifted dramatically on May 20 when the SEC reportedly requested updates to the spot Ethereum ETF filings from exchanges like NYSE and Nasdaq.
Despite potential competition from Ethereum, the introduction of its spot ETF is likely to be broadly beneficial for the cryptocurrency sector, fostering a more favorable environment for investment.
The diminishing anti-crypto regulatory stance in the U.S. could encourage more…
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