Bitcoin, Ether in Stasis as SEC ETF Decision Looms, Nvidia Hits Record High

There is a 90% probability the SEC will approve a spot ether ETF, one observer said, drawing attention to the narrowed discount in the Grayscale Ethereum Trust.

AccessTimeIconMay 23, 2024 at 7:44 a.m. UTC
Updated May 23, 2024 at 7:47 a.m. UTC
  • BTC, ETH keep recent gains ahead of the SEC's decision on VanEck's ether ETF application.
  • The sharp narrowing in the Grayscale Ethereum Trust's discount suggests a 90% probability of an ETF approval, one analyst said.

Bitcoin (BTC) and ether (ETH) consolidated recent gains early Thursday, lacking a clear directional bias before the U.S. Securities and Exchange Commission's (SEC) decision on VanEck's spot ether ETF application, due later in the day.

BTC, the leading cryptocurrency by market value, traded little changed around $69,500, and ether, the No. 2, held steady near $3,700, according to CoinDesk data.

Still, technical analysis and market positioning indicate a bullish undertone. Both cryptocurrencies maintained a strong position above their respective Ichimoku cloud lines, suggesting a bullish outlook, an interpretation echoed by analyst Josh Olszewicz on X. Further evidence came from derivatives exchange Deribit, where options on bitcoin and ether continued to reveal a bias for calls, or derivatives that allow traders to profit from price rises, according to data tracked by Amberdata.

The bullish positioning is likely to have stemmed from increased expectations the SEC will approve spot ether ETFs, broadening the demand for cryptocurrencies.

"The SEC should approve U.S.-listed ETH ETFs today. Hours before the Bitcoin ETF approval, SEC Gensler tweeted that crypto investors should consider all potential risks before making any investment. Today, a tweet could come around 9 a.m. ET. and would provide more clarity on whether approval would be imminent," Markus Thielen, founder of 10x Research, said in a note to clients.

Thielen added that the Grayscale Ethereum Trust's discount to net asset value has narrowed to just 8% from 30% a week ago, implying at least "a 90% probability that an ETF would be approved."

The change follows reports early this week that the SEC had asked for updates and amendments from spot ether ETF applicants, signaling potential approval.

"If spot ether ETFs are approved, that signals a sharp change in the official attitude toward the crypto industry – it also looks like hostility toward FIT21 is not as strong as we had feared," Noelle Acheson, author of the popular Crypto Is Macro Now newsletter, told CoinDesk, referring to the Financial Innovation and Technology for the 21st Century Act.

On Wednesday, the U.S. House of Representatives passed the act, which will clearly define whether cryptocurrencies are commodities or securities. Categorization as securities would mean a stringent SEC oversight. The legislation is also expected to establish the Commodity Futures Trading Commission (CFTC) as a leading regulator of digital assets alongside the SEC.

The bill now moves to the Senate, where its future is uncertain. Even if passed, President Joe Biden could still veto it.

NVDA hits record high

Shares in the Nasdaq-listed chipmaker Nvidia (NVDA) reached a record high during Wednesday's post-market hours after the company beat analyst estimates to report record revenue of $26.04 billion for the first quarter.

The rally might be a positive signal for cryptocurrencies, including tokens supposedly associated with artificial intelligence (AI) technology. That's because, historically, the inflow of money into the crypto market and the so-called AI coins has been partly contingent on outsized gains in NVDA and the tech-heavy Nasdaq index.

According to Coingecko, top AI coins, such as FET, ICP, RNDR and GRT, traded mixed at the time of writing, having rallied in the lead-up to the NVDA announcement.

Edited by Sheldon Reback.


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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.