After several weeks of sluggish market, Bitcoin began to rebound, breaking through $71,000 on May 21 for the first time since mid-April. It is now quoted at $71,840, with a 24-hour increase of 7.16%.

Ethereum, which has been performing relatively poorly, also rose continuously today and broke through $3,700. It is now quoted at $3,683, with a 24-hour increase of 20%.

As the market rose, Ethereum ecosystem altcoins saw a general rise, including: METIS 24-hour increase of 35.26%, now quoted at $79.73; PENDLE 24-hour increase of 26.2%, now quoted at $6.05; ENS 24-hour increase of 22.6%, now quoted at $20.115; REZ 24-hour increase of 22.6%, now quoted at $0.1272; ETHFI 24-hour increase of 23%, now quoted at $4.02; SSV 24-hour increase of 10.2%, now quoted at $46.6; UNI 24-hour increase of 21.74%, now quoted at $9.3.

ETF once again led the market up, is it Ethereum's turn this time?

In the bull market led by ETFs, the most critical indicator of Bitcoin market changes in this cycle is still the net inflow of Bitcoin spot ETFs. According to Farside Investors data, US spot Bitcoin ETFs have continued to have net inflows since May 13, with a net inflow of US$1.1139 billion in a week.

Bitcoin spot ETFs are driving the crypto market into a bull market, and with it comes regulatory challenges. For many years, what has attracted regulatory scrutiny is the behavior of individuals and their use of the technology. This has turned the neutral technology stack into a serious partisan issue, with serious divergent views between the parties on its integration into the US financial system and other areas.

Now that presidential candidates from both parties in the United States are taking advantage of the cryptocurrency industry, some major players are planning to use the crypto world to gain money and votes. Although Blockworks published an article criticizing the phenomenon of crypto politicization, which also attracted heated discussions in the crypto community, it still failed to prevent the phenomenon from continuing to spread.

The increasing politicization of cryptocurrencies can also affect spot ETF decisions. After the approval of the Bitcoin ETF, the market's attention naturally shifted to Ethereum. However, the controversy over whether Ethereum is a security has been hindering its spot ETF decision-making. Grayscale's withdrawal of its application for Ethereum futures ETFs was even speculated to be "to increase the chances of spot ETF approval."

Related reading: "Why did Grayscale withdraw its application for Ethereum futures ETFs on the eve of SEC approval? "

This week, the SEC will decide the deadline for spot ETFs. The SEC must approve both 19b-4 (trading rule changes) and S-1 (registration statement) before the ETF can be launched. Among them, the SEC must make a decision on VanEck's application by May 23, while the final deadlines for ARK 21Shares and Hashdex are May 24 and May 30.

ETF Store President Nate Geraci wrote, "Technically, it is possible that the SEC will approve 19b-4s and then slow down the approval of S-1 (especially given the lack of participation)." Then on May 21, Bloomberg Senior ETF Analyst Eric Balchunas wrote, "James and I are raising the odds of approval of the spot Ethereum ETF to 75% (up from 25%). This afternoon, we heard rumors that the SEC may make a 180-degree turn on this (an increasingly political issue), so now everyone is scrambling (just like us, everyone else thinks they will be rejected)."

Bloomberg senior ETF analyst James Seyffart added that 75% is for the May 23 deadline of 19b-4 (VanEck's deadline). It may take several weeks to months before we see S-1 approval and the actual Ethereum ETF goes live. "That being said, if we are correct and we see these theoretical approvals later this week, it should mean that the question of S-1 approval is "when" rather than "if."

Subsequently, according to CoinDesk, the U.S. SEC asked trading platforms to speed up the update of the 19b-4 documents of the spot Ethereum ETF. From this point of view, the SEC's attitude towards the Ethereum ETF may be reversed, and the market has also rebounded quickly to this series of good news.

Is the bull market back?

On May 20, 10x Research posted on social media that Bitcoin's price trend has improved significantly since last week. The price has rebounded to the resistance zone at the end of April ($67,500), exceeding the high of early May ($64,000), and breaking through $67,500 may set a new record high. The $68,300 "bull-bear dividing line" has returned to the focus because technically, breaking through this point may trigger a strong rise.

Bitcoin has broken through $70,000 today, and CryptoQuant founder and CEO Ki Young Ju also posted on the social platform that "Bitcoin is in the middle of a bull market cycle. Its market value is growing faster than its realized market value, and this trend usually lasts about two years. If this pattern continues, the bull market cycle may end in April 2025."

BitMEX founder Arthur Hayes pointed out in his latest article that in order to curb the depreciation of the yen, the Federal Reserve may reach an unlimited dollar-yen swap agreement with the Bank of Japan. Hayes believes that this move is equivalent to the Federal Reserve's implementation of yield curve control, which will cause a sharp depreciation of the US dollar.

In Hayes' view, the depreciation of the US dollar means a sharp increase in global US dollar liquidity. This will benefit the cryptocurrency market led by Bitcoin. He predicts that if the US and Japanese central banks really adopt a "simple and crude" currency swap policy, it will trigger a new round of cryptocurrency gains. By then, the price of Bitcoin is expected to hit the $1 million mark, or even set a record high.

Hayes suggested that cryptocurrency traders pay close attention to the future changes in the USD/JPY exchange rate, and at the same time, they can appropriately increase their cryptocurrency allocation. He emphasized that once the market finds that the US and Japan are conducting large-scale currency swaps and the scale of swaps continues to expand, it is likely to mean that the cryptocurrency bull market is coming.

There has been constant controversy about the Ethereum market, but some people also speculate that after the BTC bull market comes, ETH will soon reach $10,000. With the positive factors of BlackRock's launch of tokenized treasury bonds, whether the Ethereum ETF is approved or not may affect the next round of "Ethereum bull market".

Related reading: "Will Ethereum miss this bull market?"

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