Markets
Bitcoin Rises to $71,000 Level Today; What is driving the rally?
Bitcoin (BTC) soared above $71,000 on Tuesday morning, reaching its highest level since early April, while Ether jumped more than 19% to $3,700. This increase came after Bloomberg analysts increased the probability of a spot ETH exchange-traded fund (ETF) being approved in the US to 75%.
According to the latest data from SoSoValue, cited by The Economic Times, Bitcoin ETFs saw total net inflows surpassing $241 million on May 20. Notably, BlackRock’s Bitcoin ETF IBIT attracted over $66 million in net inflows, while Fidelity’s Bitcoin ETF FBTC recorded net inflows of $64 million.
Read too: SEBI recommends regulators oversee crypto trading, RBI still sees ‘macro risk’
“The crypto market is booming as investors react to a torrent of good news. ETH soared 19% in 24 hours to surpass $3,700, while Bitcoin surpassed $71,000, an increase of almost 8%. The catalyst for this surge appears to be the approval of the ETF, with rumors suggesting the SEC could be doing a 180 on this increasingly polarizing issue,” said Rajagopal Menon, vice president at WazirX.
The global cryptocurrency market capitalization jumped 7.9% to approximately $2.61 trillion in the last 24 hours.
Other major cryptocurrencies also saw significant gains: BNB (5.1%), Solana (3.5%), XRP (5.7%), Dogecoin (8.6%), Toncoin (5%), Shiba Inu (6 .8%), Avalanche (14%) and Cardano (7.8%).
What motivated the rally?
Markets began rising Monday night after Bloomberg analysts Eric Balchunas and James Seyffart raised the probability of a spot ether ETF from about 20% to 75%. CoinDesk subsequently reported that the U.S. Securities and Exchange Commission (SEC) has requested that exchanges seeking to list ether exchange-traded funds update their 19b-4 filings ahead of a key deadline this week.
This happened when the SEC asked aspiring ETF exchanges to update 19b-4 filings before the May 23 deadline. However, the ETH ETF is still unlikely to be approved this week – the SEC appears to be moving in a positive direction, and that is what triggered the market.
Meanwhile, Ethereum, the second-largest cryptocurrency in terms of value, rose 19.2% to reach $3,667 in today’s trading session.
Read too: Stage set for Binance and Kucoin to return to India
“Spot Ethereum #ETF approval odds increased from 25% to 75% as #SEC asks exchanges to expedite 19B-4 filings for Spot Ethereum ETFs. This is great news for the future of Ethereum, indicating that it could soon follow in the footsteps of #Bitcoin. Due to this, the market is witnessing significant movement and is expected to gain further momentum,” said Avinash Shekhar, co-founder and CEO, Pi42.
In the last day, the market capitalization of Bitcoin, the world’s leading cryptocurrency, rose to $1.402 trillion. According to CoinMarketCap, Bitcoin’s dominance now stands at 53.79%. Additionally, Bitcoin trading volume over the past 24 hours has seen a significant increase, rising 135% to reach $52.07 billion.
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Published: May 21, 2024, 4:51 pm IST
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