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Bitcoin exceeds $71,000, Ether jumps by 19%; Why are cryptocurrencies on the rise today?
Cryptocurrencies such as Bitcoin and Ether jumped on Tuesday after the US SEC asked exchanges that want to trade ether Exchange Traded Funds (ETFs) to update their regulatory filings. Bitcoin jumped to $71,957 and ether hit $3,720.80, highs last seen on April 9.
“Bitcoin jumped over 6% on international trade on Monday as $70,000 was breached quite easily by bulls only to reach the $72,000 resistance after 40 days. This jump, however, was led by ETH, which jumped by more than 15% as ETH gains far outpaced BTC gains after a long time,” CoinSwitch Markets Desk said in a note.
As of 12:42 pm on Tuesday, the price of Bitcoin (BTC) was at $71,334.89, which is about 6.5% higher than on Tuesday. Bitcoin’s current market capitalization currently stands at $1,405.39 billion. The 24-hour trading volume was $52.06 billion. According to real-time data from Binance, Bitcoin grew by nearly 6.45% in the past 24 hours with a circulating supply of 19.70 million.
Ethereum (ETH) is currently trading at $3,684.90 with a current market capitalization of $442.66 billion. The 24-hour trading volume is $36.30 billion. Ethereum is up approximately 19.30% in the last 24 hours with a circulating supply of 120.13 million.
While Bitcoin is the largest and best-known cryptocurrency in the world, Ether is the currency connected to the Ethereum blockchain network.
Why are Bitcoin and Ether rising today?
“The main reason for ETH’s growth could be attributed to the Ethereum ETF expiry, which is May 23. While many analysts predicted that an ETH ETF would be highly unlikely to be approved, the likelihood of an ETF approval suddenly jumped from 25% percent to 75% according to Bloomberg analyst Eric Balchunas This happened when the SEC asked would-be ether ETF trades to update their 19b-4 filings before the deadline. May 23,” 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 this is what triggered the market, he added.
With Ethereum on the move, other common layer 2 protocols built on top of Ethereum have also seen some gains, with ARB and OP leading the pack with gains of more than 18% versus USDT, CoinSwitch said.
Increase in demand for cryptocurrencies in 2024
Bitcoin prices have recovered since last October and reached a record high of $73,803.25 in March. Bitcoin is now more than 82% higher from its yearly low of $38,505 on January 23.
The approval and launch of spot bitcoin exchange-traded funds in the United States this year has opened the asset class to new investors and reignited enthusiasm that evaporated when prices collapsed in the “crypto winter” of 2022 .
The world’s largest cryptocurrency has risen 161% over the past two quarters, thanks to hopes of an interest rate cut by the US Federal Reserve and optimism over the launch of bitcoin spot Exchange Traded Funds (ETFs).
Higher Bitcoin wallet password recovery requests
Cryptocurrencies exist on a decentralized digital ledger known as a blockchain, and investors can choose to access their holdings via a locally stored software wallet or a hardware wallet, to avoid the risks of owning cryptocurrencies with an exchange, as is the case with ex FTX.
Losing access to a crypto wallet is a well-known problem. Investors forgetting their complex passwords is one of the main reasons, but loss of access to two-factor authentication devices, unexpected closures of cryptocurrency exchanges, and cyberattacks are also common.
Wallet passwords are usually alphanumeric, and the wallet provider also offers a series of random words, known as “seed phrases”, for additional security – both are known only to the user. If investors lose passwords and phrases, access to their wallets is cut off.
According to a Reuters report, password recovery service companies are seeing an increase in requests.
A Switzerland-based company that uses Nvidia’s graphics processing unit cards to run artificial intelligence models to access locked wallets saw requests increase tenfold in the first quarter, compared to the same period a year ago .
“We have seen a spike (in requests to unlock wallets) whenever the price changes dramatically,” according to the Reuters report which cited a senior company executive who wished to remain anonymous.
ReWallet, a Germany-based wallet recovery provider, reported a 334% increase in requests in the previous quarter and reported a record number of requests in early March, when bitcoin prices hit an all-time high .
The firm estimates that about 20% of the total 19 million bitcoins in circulation, as of March 13, are likely dormant and are now worth about $237 billion.
US-based Wallet Recovery Services has seen a 30% increase in requests this year since mid-April.
Bitcoin mining in El Salvador
Meanwhile, El Salvador has mined nearly 474 bitcoins since 2021 thanks to a geothermal power plant powered by the volcano, bringing the government’s total bitcoin portfolio to nearly $354 million at current prices, according to official data.
The country’s “Bitcoin Office,” an official government body, reports that government coffers now hold 5,750 bitcoins.
The new additions, 473.5 bitcoins worth around $29 million as of September 2021, were powered by a small amount of geothermal energy generated by the country’s massive Tecapa volcano, touted as an eco-friendly way to accumulate the popular cryptocurrency , which is not regulated by any central bank.
In 2021, El Salvador became the first country to adopt bitcoin as legal tender, along with the US dollar adopted two decades earlier. Bitcoin’s move earned Nayib’s government harsh criticism for its embrace of the volatile cryptocurrency, including from the International Monetary Fund (IMF).
(With input from agencies)