BTC surges 6% to touch $70k as Ethereum ETF rumors cause market frenzy

Bitcoin (BTC) surged past the $70,000 mark on May 21, marking a significant milestone driven by a flood of investment into spot Bitcoin exchange-traded funds (ETFs) and a broader market rally.

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

Ethereum (ETH) arguably led the rally over the past couple of hours — experiencing a staggering 14.5% rise within an hour on Monday amid speculation that the US SEC might approve spot Ethereum ETFs.

ETH climbed from $3,143 to $3,518 as of press time.

Renewed interest

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

The surge has led to significant liquidations in the market, with over $235 million in positions closed in the past 24 hours, including $63 million in Bitcoin short positions alone, according to CoinGlass.

Analysts indicate that most on-chain metrics suggest the beginning of a bull market despite some showing signs of potential peaking. The recent bounce near $60,000 has sparked renewed interest, with Farside Investors reporting approximately $950 million in inflows last week, a level not seen since March.

Bitcoin’s 51% year-to-date gain reflects investors’ anticipation of US monetary expansion, evidenced by the M2 monetary base surpassing $21 trillion in April 2024. This increase in circulating money suggests rising inflationary pressures despite a period of company and individual spending hesitancy.

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

Scarcity

Bitcoin reached a new all-time high of $73,737 in March and is now just 5% below that level. The recent run appears to be largely driven by the new Bitcoin ETFs, which trade on traditional stock exchanges and allow investors to buy shares that…