ETH Surges 20%, BTC Reaches $72,000 Due to SEC's Positive ETF Signal for Ethereum

ETH has skyrocketed 20% to reach $3,700 after the SEC requested entities submitting applications for Ethereum spot ETFs to provide additional information.

ETH Surges 20%, BTC Reaches $72,000 Due to SEC's Positive ETF Signal for Ethereum

According to sources from CoinDesk on the morning of May 21 (Vietnam time), the U.S. Securities and Exchange Commission (SEC) has requested entities filing registration applications for Ethereum spot ETFs to submit supplemental Form 19b-4 filings. This marks the SEC's first positive move towards approving an Ethereum ETF after months of silence.

Form 19b-4 is submitted to inform the SEC about changes to proposed ETFs and is a necessary document to move towards approval.

Following the latest developments, ETF analysts at Bloomberg, Eric Balchunas and James Seyffart, have raised the probability of an Ethereum spot ETF approval this week from 25% to 75%. They cite SEC facing legal pressure to change its stance on ETH.

As previously reported by Coin68, May 23 is the first deadline for the SEC to approve or reject the proposed Ethereum ETFs by VanEck and ARK Invest. However, investor sentiment was previously low, partly because the SEC had not engaged constructively with ETF initiators, unlike the pre-ETF Bitcoin spot period. Another reason was SEC Chairman Gary Gensler's anti-ETH stance, targeting many Ethereum ecosystem companies like Uniswap and Consensys, and remaining ambiguous on the securities classification of ETH.

Proposed Ethereum spot ETFs under SEC consideration. Image: Bloomberg

ETH prices have reacted extremely positively to these successive changes. The world's second-largest cryptocurrency has surged by 20% over the past 6 hours, rising from $3,150 to $3,720 - its highest level since early April.

4-hour chart of ETH/USDT pair on Binance at 08:10 AM on May 21, 2024

Statistics from VeloData indicate that Ethereum's market capitalization increased by an additional $70 billion on the morning of May 21 - nearly approaching Solana's market cap - setting a record for the highest single-day increase in history.

Bitcoin (BTC) prices also surged by 7% to nearly $72,000, supporting the overall market recovery trend, signaling a day with strong inflows from BTC ETFs and extending the consecutive days of positive fund flows to 6.

4-hour chart of BTC/USDT pair on Binance at 08:10 AM on May 21, 2024

In the past 12 hours, nearly $285 million worth of derivative liquidations have occurred in the market, predominantly in BTC and ETH, with 86% of orders being short liquidations.

Market derivative liquidation data, screenshot from CoinGlass at 08:10 AM on May 21, 2024