Ethereum Soars 20%, Lifting Arbitrage and Optimism

Rumors of a possible approval of Ethereum spot EFAs boosted the Ethereum ecosystem all day, with ETH prices down 20% on the day to $3,700—trading at $3,687 at the time of writing—and sister tokens Arbitrage ( ARB ) and Optimism ( OP ) both doing well. 18% on Monday.

The bullish sentiment has already spread to other cryptocurrencies, with Solana (SOL) and Avalanche (AVAX) rising above $40 and $188 respectively, representing gains of over 25% over the past seven days for both.

The sudden rally to start the week was sparked by two Bloomberg ETF analysts – Eric Balchunas and James Seifert – expressing their joint prediction that the Securities and Exchange Commission “could do a 180 on this increasingly political issue” and approve the Ethereum spot ETF, with the first major deadline coming later this week.

They raised their estimated probability to 75% – a big improvement from their previous estimate of 25%, which was more pessimistic than other analysts who put the odds at 50-50 earlier this year.

Crypto oddsmakers are certainly changing their outlook, with the collective odds of Ethereum spot ETF approval at the end of the month jumping from 10% yesterday on Polymarket to 61%, as of this writing. Optimism has been waning ever since the release of Bitcoin spot ETFs, after betting options peaked at 76% in January.

As with the long and medium-term Bitcoin spot ETF approval process, the SEC has been systematically delayed in making a decision on Ethereum equivalents. The prospect of approval has dimmed, with this week's deadline prompting the federal regulator to declare a decisive departure from bitcoin's favored commodity status.

Late last week, however, a debate on Capitol Hill prompted many Democrats to join Republicans in opposing the president. Joe Biden's pro-SEC stance is a major battle in the broadly partisan battle over US crypto policy.

Meanwhile, the leading cryptocurrency exchange Coinbase said it saw Ethereum spot ETFs as an event – if not approved immediately on May 23 -.

All of this came as top coin Bitcoin was in the midst of its own rally, with BTC price clearing $70,000 earlier in the day after massive liquidation of short-positions—heights not seen since April 12—and nearing an all-time high of $73,737. In March.

Good sentiment was contagious, and by Monday's close, the top 25 cryptocurrencies by market capitalization were green for the day and for the past 7 days.

Among the meme coins, Bonk and Pepe have both gained more than 20% in the last 24 hours.