In a remarkable development in the cryptocurrency world, Ethereum, the second-largest cryptocurrency by market capitalization, has surpassed the global payments giant Mastercard. Ethereum's market cap surged to $440 billion, eclipsing Mastercard's $427 billion, driven by a significant price increase of more than 16% over the past 24 hours.

The dramatic rise in Ethereum’s value follows a surprising shift in stance by the U.S. Securities and Exchange Commission (SEC) regarding the approval of spot Ethereum exchange-traded fund (ETF) applications. Bloomberg analysts, who previously estimated a mere 25% chance of approval, have now raised the odds to 75%. This optimistic reassessment stems from rumors of the SEC rapidly changing its position on Ethereum ETFs. Just days prior, it was widely believed that VanEck’s ETF application would be rejected due to insufficient engagement from the SEC.

Eric Balchunas, Bloomberg's senior ETF analyst, noted that the SEC has instructed exchanges to promptly update their 19b-4 filings, indicating that an approval could be imminent, possibly as soon as Wednesday. Alex Thorn, head of research at Galaxy Digital, suggested that the SEC might classify the underlying Ethereum as a non-security, while treating staked Ether as a security. This nuanced stance would align with the SEC's various court cases and investigations, potentially allowing the approval of Ethereum ETFs without contradicting its earlier positions.

The price of Ethereum surged by 16.2% in the last 24 hours, according to CoinGecko data. Bitcoin, the largest cryptocurrency, also experienced a 6% increase, reaching a peak of $71,650 earlier today. Despite this recent rally, Ethereum is still 25.4% below its all-time high of $4,878, achieved two years ago.

Ethereum’s leap past Mastercard highlights the growing influence and adoption of cryptocurrencies in the global financial landscape. Founded in 2015, Ethereum has continually expanded its ecosystem, driving innovations such as smart contracts and decentralized finance (DeFi). The potential approval of an Ethereum ETF by the SEC could further legitimize and enhance its position in mainstream finance, attracting a broader range of institutional investors.

As the crypto market evolves, the interplay between regulatory decisions and market dynamics will continue to shape the future trajectory of digital assets like Ethereum. This recent surge underscores the volatile yet transformative nature of cryptocurrencies and their increasing significance in the global economy.