Bitcoin Crosses $71,000, Ether Jumps 19%; Why Cryptocurrencies Are Rising Today?

Cryptocurrencies like Bitcoin and Ether jumped on Tuesday after the US SEC asked exchanges that want to trade ether exchange-traded funds (ETFs) to update regulatory filing. Bitcoin jumped as high as $71,957 and ether hit $3,720.80, the high levels last seen on April 9.

“Bitcoin on Monday jumped more than 6 per cent on international exchanges as $70,000 was breached fairly easily by the bulls only to reach the resistance of $72,000 after 40 days. This jump, however, was led by ETH which jumped more than 15 per cent as ETH gains surpassed BTC by distance after a really long time,” CoinSwitch Markets Desk said in a statement.

As on 12:42 pm on Tuesday, Bitcoin (BTC) prices stood at $71,334.89, which is about 6.5 per cent higher as compared to Tuesday. The current market cap of bitcoin currently stands at $1,405.39 billion. The 24-hour trading volume is $52.06 billion. Bitcoin is nearly 6.45 per cent up in the last 24 hours with a circulating supply of 19.70 million, according to Binance’s real-time data.

Ethereum (ETH) is currently trading at $3,684.90 with a current market cap of $442.66 billion. The 24-hour trading volume is $36.30 billion. Ethereum is about 19.30 per cent in the last 24 hours with a circulating supply of 120.13 million.

While Bitcoin is the world’s biggest and best-known cryptocurrency, Ether is the coin linked to the ethereum blockchain network.

Why Are Bitcoin, Ether Rising Today?

“The major reason for ETH’s rise could be attributed to the Ethereum ETF deadline, which is May 23. While many analysts were predicting that it is highly unlikely for an ETH ETF to be approved, the probability of an ETF approval suddenly jumped from 25 per cent to 75 per cent by Bloomberg analyst Eric Balchunas. This happened as SEC asked aspiring ether ETF exchanges to update 19b-4 filings ahead of the May 23 deadline,” according to CoinSwitch Markets Desk.

However it is still unlikely that the ETH ETF will be approved this week itself — the SEC seems to be moving in a positive direction, and that is what has triggered the market, it added.

With Ethereum on the move, other common layer-2 protocols built on top of Ethereum saw some gains as well with ARB and OP leading the pack with more than 18 per cent gains against USDT, CoinSwitch stated.

Cryptocurrencies’ Increased Demand in 2024

Bitcoin prices regained traction since last October and hitting a record high of $73,803.25 in March. Bitcoin is now higher by over 82 per cent from the year’s low of $38,505 on January 23.

The approval and launch of spot bitcoin exchange-traded funds in the US this year has opened the asset class to new investors and reignited the excitement that evaporated when prices collapsed in the “crypto winter” of 2022.

The world’s largest cryptocurrency has surged 161% in the past two quarters, on hopes of a cut in interest rates by the US Federal Reserve and optimism around the launch of spot bitcoin exchange-traded funds (ETFs).

Higher Bitcoin Wallet Password Recovery Requests

Cryptocurrencies exist on a decentralized digital ledger known as blockchain and investors may opt to access their holdings either through a locally stored software wallet or a hardware wallet, to avoid risks related to owning crypto with an exchange, as in the case of the former FTX.

Losing access to a crypto wallet is a well-known problem. Investors forgetting their intricate passwords is a primary reason, but loss of access to two-factor authentication devices, unexpected shutdowns of cryptocurrency exchanges and cyberattacks are also common.

Wallet passwords are usually alphanumeric and the wallet provider also offers a set of randomized words, known as “seed phrases”, for additional security – both these are known only to the user. If investors lose the passwords and phrases, access to their wallets is cut off.

According to a Reuters report, password recovery services firms are witnessing a jump in requests.

A Switzerland-based firm that uses Nvidia’s graphic processing unit cards to run artificial intelligence models to access stranded wallets saw requests jump tenfold in the first quarter, compared with the year-ago period.

“We have seen a spike (in requests to unlock wallets) every time the price changes dramatically,” according to the Reuters report citing a top executive at the firm who did not want to be named.

ReWallet, a Germany-based wallet recovery services provider, saw a 334% jump in requests in the previous quarter and logged a record-high number of requests in early March, when bitcoin prices touched an all-time peak.

The firm estimates that about 20% of the total 19 million bitcoins in circulation, as of March 13, are likely inactive and now worth around $237 billion.

U.S.-based Wallet Recovery Services saw a 30% bump in requests this year as of mid-April.

El Salvador’s Bitcoin Mining

Meanwhile, according to official data, El Salvador has mined nearly 474 bitcoins since 2021 thanks to a volcano-fueled geothermal power plant, bringing the government’s total bitcoin portfolio to nearly $354 million at current prices.

The country’s ‘Bitcoin Office’, an official government entity, reports that government coffers now hold 5,750 bitcoins.

The new additions, 473.5 bitcoins worth some $29 million since September of 2021, were powered by a small amount of geothermal energy generated by the country’s imposing Tecapa volcano, touted as a green way to accumulate the well-known cryptocurrency, which is not regulated by any central bank.

In 2021, El Salvador became the first country to adopt bitcoin as legal tender, alongside the U.S. dollar which it adopted two decades earlier. The bitcoin move earned Nayib’s government harsh criticism for its embrace of the volatile cryptocurrency, including from the International Monetary Fund (IMF).

(With Inputs from Agencies)