The world’s biggest cryptocurrencies have soared in value this week as markets anticipate US regulators approving the launch of new investment vehicles.
Bitcoin stood at $71,195.82 on mid-Tuesday afternoon after rising by 6.4 per cent in the previous 24 hours, the first time it had surpassed $70,000 since mid-April.
The world’s biggest virtual currency by market capitalisation has climbed by over half since January, when the US Security and Exchanges Commission authorised the launch of spot bitcoin exchange-traded funds.
For use: Ether is a cryptocurrency used on Ethereum, a decentralised blockchain platform widely used for building new cryptocurrencies
Bitcoin prices have also benefited from investors anticipating interest rate cuts by the US Federal Reserve and a recent surge of investment into spot bitcoin ETFs.
Around $1.2billion have flowed into these funds since 13 May, according to data from London-based Farside Investors.
Victoria Scholar, head of investment at Interactive Investor, said if bitcoin rises back above the record $73,800 it reached in April, it could propel ‘further buying and push the cryptocurrency to fresh record highs’.
Meanwhile, Ether has skyrocketed by 23.6 per cent to $3,810.83 over the last 24 hours, meaning its value has more than doubled over the past year.
The SEC will decide on Thursday and Friday, respectively, whether to accept or reject applications for spot-ether ETFs from American investment firms VanEck and Ark Invest.
Two Bloomberg ETF analysts, Eric Balchunas and James Seyffart, have raised their odds that the regulator will authorise the funds from just 25 to 75 per cent.
Hong Kong’s securities regulator gave approval back in April for the first spot bitcoin and ethereum ETFs.
Ether is a cryptocurrency used on Ethereum, a decentralised blockchain platform widely used for building new cryptocurrencies.
Spot ether ETFs would allow investors to put their money behind the currency without directly owing ether.
However, regulators have been reluctant to sanction such an ETF because ether is ‘staked’. This involves someone committing the currency as collateral to support transactions on the Ethereum network and earning rewards as a result.
The SEC began clamping down on the practice last year, fining crypto exchanges like Kraken $30million for offering unregistered staking-as-a-service securities.
In March, it scored a significant victory when a judge said a jury trial could hear the SEC’s claim that Coinbase had engaged in unregistered securities sales.
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