- The SEC’s approval of the first Bitcoin ETF caused Bitcoin to initially drop then recover while Ether prices surged to new highs.
- Bitcoin’s muted reaction was expected as approval was priced in, but Ether rallied 14.5% to $2586 as traders anticipated SEC approval of Ether ETFs next.
- Investors rotated into the relatively cheap Ether ahead of potential Ether ETF approvals, betting regulatory approval would drive Ether higher.
The cryptocurrency market saw a rollercoaster of price changes for bitcoin and ether after the SEC approved the first spot bitcoin exchange-traded funds (ETFs) to trade in the US. While bitcoin wavered, ether prices surged to new highs.
Bitcoin’s Initial Drop and Recovery
Bitcoin initially edged lower after the news, despite the ETF approval being a watershed moment for the crypto industry. The SEC’s decision came after a years-long battle to get a bitcoin ETF approved. However, bitcoin soon erased its losses and traded flat on the day.
Ether’s Price Rally
Meanwhile, the price of ether soared as high as $2580, its highest level since May 2022. Ether ended the day up 14.5% at $2586. The rally in ether lifted other coins in the Ethereum ecosystem as well, with Polygon’s token gaining 13% on the day.
Driving Forces Behind the Divergent Moves
According to analysts, bitcoin’s lackluster performance after the ETF news was expected, as the approval was already priced in. However, trading volumes have exploded as expected.
Ether’s rally came as traders rotated into the asset ahead of potential SEC approval for ether ETFs. Ether is seen as relatively cheap compared to other cryptos. Investors are betting the next major regulatory approval will be for ether ETFs.
Conclusion
The long-awaited bitcoin ETF approval saw investors quickly move on to speculate on the next potential positive regulatory decision – the approval of ether ETFs. This dynamic drove ether to substantially outperform bitcoin on the historic day for the crypto asset class.
