BTC jumps 6% to $70,000 as Ethereum ETF rumors cause market frenzy

Bitcoin (BTC) surpassed the $70,000 mark on May 21, marking a milestone driven by a flood of investments in spot Bitcoin exchange-traded funds (ETFs) and a broader market rally.

Bitcoin price surged to $70,325, a 6% increase over 24 hours, before settling at $68,700 at press time, based on CryptoSlate data.

Ethereum (ETH) has arguably led the rally over the past few hours – seeing a staggering 14.5% rise in an hour on Monday amid speculation that the US SEC may approve Ethereum spot ETFs.

ETH rose from $3,143 to $3,518 at press time.

Renewed interest

THE renewed interest in Bitcoin ETFs follows weeks of outflows, with nearly 1 billion dollars flowing into these funds, providing investors with exposure to the leading digital asset.

This surge led to significant liquidations in the market, with more than $235 million in positions closed in the last 24 hours, including $63 million in short positions in Bitcoin alone, according to CoinGlass.

Analysts say most on-chain metrics suggest that start of a bull market although some are showing signs of a potential peak. The recent rebound near $60,000 has sparked renewed interest, with Farside Investors reporting around $950 million in inflows last week, a level not seen since March.

Bitcoin’s 51% year-to-date gain reflects investors’ anticipation of U.S. monetary expansion, as evidenced by the fact that the M2 monetary base surpassed $21 trillion in April 2024. This increase in currency in circulation suggests an increase in inflationary pressures despite a period of hesitation in spending by businesses and individuals.

Meanwhile, the Federal Reserve’s efforts to manage inflation and avoid a recession could affect the liquidity and attractiveness of assets like Bitcoin.

Rarity

Bitcoin hit a new all-time high of $73,737 in March and now sits just 5% below that level. The recent rise appears to be largely driven by new Bitcoin ETFs, which trade on traditional exchanges and allow investors to buy stocks that track the asset’s price.

Supporting the bullish sentiment, Bitcoin reserves on major exchanges fell to a seven-year low. Data from CryptoQuant shows that only 1,918,417 BTC was available on major trading platforms as of May 19, a significant decrease from the previous year.

This scarcity, coupled with the recent halving event that reduced potential new supply from miners, makes the bearish outlook on Bitcoin increasingly difficult to justify.

The crypto community continues to closely monitor Bitcoin price action, with many wondering whether the digital asset will continue its ascent or face a significant correction in the coming weeks.

Mentioned in this article