Ethereum skyrockets 20% amid strong ETF approval predictions

Recently, cryptocurrencies have experienced their most dynamic day. Following the approval of Bitcoin ETFs in the United States in January this year, all eyes have turned to Ethereum, the second-largest cryptocurrency by market cap. VanEck, a U.S. investment fund, has submitted an application for Ethereum ETFs to the Securities and Exchange Commission (SEC), with a decision expected on May 23.

Until last week, approval from the SEC seemed unlikely. However, analysts recently suggested a “75% chance of approval,” sparking a surge across cryptocurrency markets.

BTC, ETH prices on May 21

With just two days remaining until the SEC’s decision, Ethereum has surged from its Monday low of $3,050 to $3,700. As of this morning, Ethereum is hovering around $3,700, marking a 20% increase in a single day. Meanwhile, Bitcoin has tested above $70,000 for the first time in seven weeks, with a daily rise approaching 7%.

What does ETF approval mean?

Exchange-traded funds (ETFs) listed on U.S. stock exchanges can invest in cryptocurrencies only with SEC approval. Once approved, these funds can directly invest in the permitted crypto assets. Consequently, investors in these funds can indirectly invest in Bitcoin or Ethereum without purchasing the cryptocurrencies themselves.

What happens if ETF is approved?

Following the approval of Bitcoin ETFs in January, Bitcoin rose from $38,000 to $73,800, driven by over $10 billion in ETF-related investments. Similar expectations now exist for Ethereum. Should the SEC grant approval, investment funds are anticipated to channel substantial money into Ethereum over time.

Key levels to watch for Ethereum

The $3,725 level has been a notable resistance for Ethereum since March 16. If this level is surpassed, Ethereum could potentially accelerate toward $4,000.

However, there are increasing warnings about the possibility of a “negative decision” from the SEC, which could lead to a downward trend.