Key Points
- The overall cryptocurrency market cap surged by $200 billion in 24 hours, driven by significant gains in Bitcoin and Ethereum.
- Bitcoin ETF inflows and anticipation of approval for spot ETH ETFs by the SEC have contributed to this positive market momentum.
The cryptocurrency market has seen a substantial increase, with its total market cap exceeding $2.7 trillion – a $200 billion increase within a single day. The primary catalysts for this growth were the impressive gains in Bitcoin (BTC) and Ethereum (ETH), along with a positive market sentiment sparked by potential changes in regulations.
Bitcoin (BTC) reached a high point not seen in weeks, touching $72,000 after hovering around $67,000 for several days. This surge was triggered by the release of favorable US Consumer Price Index (CPI) figures and was further boosted during the Monday evening US trading session. Despite a minor pullback, BTC continues to stay above $70,000, boasting a market cap of $1.4 trillion.
Bitcoin ETF Inflows and Their Impact
The market’s positive momentum has been significantly influenced by the influx of funds into Bitcoin ETFs. Farside data reveals that Bitcoin ETFs experienced a considerable inflow of $237.2 million on May 20.
Ark ARKB led the way with an inflow of $68.3 million, closely followed by BlackRock IBIT and Fidelity FBTC, with inflows of $66.4 million and $64.0 million respectively. This represents roughly eight times the daily mined supply of Bitcoin, indicating strong investor interest.
Ethereum and the Altcoin Rally
Ethereum (ETH) led the charge in the altcoin rally, spurred by renewed optimism surrounding the potential approval of spot ETH exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). Although the announcement is slated for May 23, market speculation about possible approval is already making waves.
At one point, ETH saw a 20% surge, reaching a high of $3,710, its highest price since April 9. Ether futures have also increased in popularity due to the positive sentiment surrounding the potential approval of spot ETH ETFs. According to CoinGlass, the notional open interest, which represents the total dollar value of active ether futures contracts, soared 25% to a record $14.05 billion in the past 24 hours. This surpasses the previous high of $13.2 billion recorded in March.
Analysts at Bloomberg have raised the probability of SEC approval for spot Ether ETFs from 25% to 75%, citing expedited filing processes. This regulatory optimism is further bolstered by recent cryptocurrency-friendly legislation, enhancing the market’s bullish outlook. The potential approval of spot ETH ETFs has not only boosted Ethereum’s price but also ignited a broader market rally.
Wider Market Advances
Other major cryptocurrencies, including Binance Coin, XRP, Toncoin, Dogecoin, Cardano, Shiba Inu, Polkadot, and Bitcoin Cash, saw gains of up to 8%. Avalanche was another standout, posting double-digit gains.
Investors are now hopeful that the bull market conditions will continue, driven by the growing optimism surrounding potential regulatory approvals for spot ETH ETFs.
