The cryptocurrency market surged on May 21 amid growing optimism that the U.S. Securities and Exchange Commission (SEC) may soon approve a spot Ethereum exchange-traded fund (ETF). The rally sent ripples across digital assets, with Ethereum soaring nearly 20%—its largest single-day gain since November 2022—briefly surpassing $3,700. Bitcoin followed suit, climbing over 6% to breach the $71,000 mark for the first time since April 12.
Market sentiment was further amplified by strong performance in Hong Kong’s crypto-linked ETFs, reflecting global investor appetite for regulated exposure to digital assets.
Market Reaction to Potential Ethereum ETF Approval
According to CoinMarketCap, the total cryptocurrency market capitalization rose 8.21% over the past 24 hours, reaching $2.61 trillion. The surge triggered nearly 80,000 liquidations across leveraged trading positions globally—a sign of intense volatility and heightened speculative activity.
Hong Kong-listed crypto ETFs posted significant gains:
- CSOP Ethereum ETF: +18.75%
- Bosera Ethereum ETF: +18.51%
- Harvest Ethereum ETF: +18.34%
- CSOP Bitcoin ETF: +6.11%
- Bosera Bitcoin ETF: +6.26%
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This broad-based rally underscores how institutional momentum—particularly around regulatory milestones—can drive investor behavior across both spot and derivatives markets.
Why Ethereum ETF Speculation Is Gaining Traction
Analysts point to increasing signals that the SEC may reverse its long-standing skepticism toward spot Ethereum ETFs. Reports suggest regulators are urging exchanges to expedite updates to ETF filings, fueling speculation that decisions could come as early as May 23—the deadline for VanEck’s and ARK Invest’s applications.
Eric Balchunas, senior ETF analyst at Bloomberg, raised his approval odds from 25% to 75%, noting that “there’s talk the SEC could do a 180 on this.” This shift in tone has prompted traders and institutions to reposition their portfolios ahead of a potential green light.
Chris Newhouse, DeFi analyst at Cumberland Labs, observed a dramatic shift in market positioning: “Traders who previously dismissed the idea of an approved Ethereum ETF are now building large spot and leveraged positions. Trading volume has spiked across both cash and derivatives markets.”
The reasoning behind this optimism lies in evolving regulatory narratives. While the SEC has historically resisted spot Bitcoin and Ethereum ETFs due to concerns about market manipulation and investor protection, its eventual approval of 11 spot Bitcoin ETFs in January 2024 set a critical precedent.
Now, with Ethereum transitioning to a proof-of-stake model—making it more energy-efficient and arguably less susceptible to manipulation—regulators may view it as closer to a security than a commodity, potentially easing approval pathways.
Bitcoin Reclaims Key Resistance Level
As Ethereum led the charge, Bitcoin benefited from spillover demand. The flagship cryptocurrency climbed above $71,000, reclaiming a psychological resistance level not seen since mid-April. This move signals renewed confidence among long-term holders and institutional investors.
Bitcoin’s resurgence is also supported by macroeconomic factors:
- Cooling inflation data in the U.S.
- Expectations of rate cuts later in 2025
- Increased adoption of Bitcoin as a reserve asset by corporations and sovereign funds
These elements combine to create a favorable environment for digital assets, especially when paired with positive regulatory news.
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Mixed Outlook: Regulatory Caution Remains
Despite bullish momentum, some market participants remain cautious. Ravi Doshi, Market Head at FalconX, warned that while expectations are high, the SEC may still delay decisions beyond the May 23–24 window.
“Historically, the SEC moves deliberately,” Doshi noted. “Even if they’re inclined to approve, procedural hurdles or last-minute legal reviews could push timelines further.”
This skepticism highlights the ongoing tension between innovation and regulation in the crypto space. While technological adoption accelerates, regulatory clarity remains fragmented across jurisdictions.
Moreover, analysts emphasize that even if spot Ethereum ETFs are approved, initial inflows may be modest compared to Bitcoin ETFs. Ethereum’s complex ecosystem—including smart contracts, staking rewards, and decentralized applications—may require more education for mainstream investors.
Core Keywords Driving Market Sentiment
To align with search intent and improve SEO visibility, key terms naturally integrated throughout this analysis include:
- Ethereum ETF approval
- Bitcoin price surge
- crypto market rally
- spot Ethereum ETF
- Hong Kong crypto ETFs
- SEC decision timeline
- Bitcoin above $71,000
- cryptocurrency investment trends
These keywords reflect what users are actively searching for during periods of market volatility and regulatory anticipation.
Frequently Asked Questions (FAQ)
What triggered the recent crypto market rally?
The surge was primarily driven by rumors that the U.S. SEC might approve one or more spot Ethereum ETFs by May 23, 2025. This expectation boosted investor confidence and led to widespread buying across digital assets.
Has the SEC officially approved any Ethereum ETFs yet?
As of May 21, 2025, no spot Ethereum ETF has been officially approved. However, regulatory signals suggest a higher likelihood of approval compared to previous quarters.
How did Hong Kong crypto ETFs perform during the rally?
Hong Kong-based Ethereum ETFs saw dramatic gains, with CSOP, Bosera, and Harvest funds rising over 18%. Bitcoin-linked ETFs also advanced by more than 6%, reflecting strong regional demand.
Could Ethereum ETF approval impact its price long-term?
Yes. Similar to Bitcoin’s price trajectory after ETF approvals in early 2025, Ethereum could see sustained inflows from institutional investors seeking regulated exposure, potentially supporting higher valuations.
Are there risks associated with investing in crypto ETFs?
Yes. Crypto ETFs are subject to market volatility, regulatory changes, and liquidity risks. Investors should conduct thorough research and consider their risk tolerance before investing.
Where can I track live updates on Ethereum and Bitcoin prices?
You can monitor real-time price movements, trading volumes, and news developments through major crypto platforms offering transparent market data and analytics tools.
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Final Thoughts: A Pivotal Moment for Crypto Regulation
The current market dynamics highlight a turning point in the maturation of digital assets. With Bitcoin already integrated into traditional finance via ETFs, Ethereum now stands at a similar crossroads.
Approval of a spot Ethereum ETF would not only validate the asset class but also deepen institutional participation, enhance market liquidity, and strengthen investor trust.
While uncertainty remains until official announcements are made, the momentum is undeniable. Whether or not the SEC delivers a decision by May 23, the mere possibility has reignited global interest in cryptocurrency investments—and that sentiment shows no signs of fading soon.