Bitcoin, the leading digital currency, has experienced a remarkable surge, gaining an impressive 8.5% within a 24-hour period on May 21, reaching a price of $71,926. This significant jump places Bitcoin just 2.5% shy of its all-time high, sparking excitement among investors and enthusiasts alike. The recent price surge appears to be driven by growing optimism surrounding the potential approval of a U.S. spot Ethereum exchange-traded fund (ETF) and a broader market trend seeking inflation protection.

The positive sentiment has also propelled gold and the S&P 500 to new all-time highs on May 20, further solidifying the belief that Bitcoin is becoming a mainstream asset class. However, some traders are questioning whether the recent price surge was driven by excessive use of leveraged long positions and the potential implications of a spot Ether (ETH) ETF.

The U.S. Senate's pivotal decision on May 16 to overturn the SEC's Bulletin 121, which had imposed stringent capital requirements on banks holding customer digital assets, has played a significant role in shifting the regulator's stance. This move, coupled with the Senate's resolution favoring cryptocurrency adoption, has prompted a strategic reevaluation at the White House, according to Perianne Boring, the founder and CEO of the Blockchain Trade Association Digital Chamber.

The SEC's chair, Gary Gensler, who had previously shown considerable reluctance to classify Ethereum as a non-security or hint at any likelihood of approving its spot ETF, has now reportedly requested updates to the spot Ethereum ETF filings from exchanges like NYSE and Nasdaq. This shift in the regulatory landscape could encourage more investment managers, including pension funds, to adopt a more favorable view of the cryptocurrency sector.

Bitcoin derivatives are also showing signs of moderate bullish sentiment, with the BTC futures premium climbing to 14%, the highest in five weeks. This indicates that the market is cautiously optimistic about Bitcoin's future performance, in contrast to the extreme market optimism seen on April 1, when the futures premium hit 25%.

As the cryptocurrency market continues to evolve and gain mainstream acceptance, the approval of a spot Ethereum ETF and the diminishing anti-crypto regulatory stance in the U.S. could pave the way for new all-time highs for Bitcoin in the weeks ahead. Investors and enthusiasts alike are eagerly anticipating the next chapter in Bitcoin's remarkable journey.