Several major cryptocurrencies rallied on Tuesday amid news of growing crypto adoption and speculation surrounding the timing of the first spot Ethereum-centric exchange-traded fund (ETF) approvals.

When all was said and done during today's regular trading session, the price of Bitcoin (CRYPTO: BTC) was up 4.5%, Ethereum (CRYPTO: ETH) had gained 1.8%, and Dogecoin (CRYPTO: DOGE) climbed 12.2%.

Company card for Bitcoin CRYPTO:BTC

With Bitcoin ETFs approved, are Ether ETFs next?

The price of Bitcoin climbed above $57,000 today for the first time since December 2021, apparently bolstered by record inflows into Bitcoin ETFs. Around $2.5 billion flowed into digital asset investment products last week, according to data from crypto research firm CoinShares, with Bitcoin funds responsible for 99% of those inflows. That influx of capital followed a historic decision last month by the United States Securities and Exchange Commission (SEC) to simultaneously approve the first 13 applications for spot Bitcoin ETFs.

Those approvals, of course, were the culmination of months of speculation after the SEC declined to appeal a federal court's ruling in August that prevented crypto-asset manager Grayscale Investments from converting its popular Grayscale Bitcoin Trust into an ETF. That inaction put the onus back on the SEC to move forward with its Bitcoin ETF approval process.

For several weeks leading up to the SEC's multiple thumbs up, many opportunistic traders capitalized on a broad crypto rally while noting that ETFs are a much more accessible medium for investors hoping to put their money to work in cryptocurrencies. ETFs can be bought and sold throughout the normal trading day through nearly any online brokerage, in contrast to the previous need for investors to set up separate crypto accounts or wallets with a crypto-specific broker. The approvals also stand tall as a de facto vote of confidence from a government agency in crypto ETFs as a legitimate investment medium.

Still, it's worth noting that after a multi-month rally that began in October, major cryptocurrencies initially pulled back following the official launch of the first spot Bitcoin ETFs six weeks ago.

According to data analytics firm CryptoQuant, however, the capital influx stemming from spot crypto ETFs -- including a potential Ether ETF next -- has the potential to increase the overall cryptocurrency market capitalization by a total of more than $1 trillion over the long term.

To that end, crypto traders have now turned their eyes toward the date of May 23, 2024 -- which is the final deadline for the SEC to approve (or deny) spot Ether ETF applications from multiple investment management companies including VanEck and Ark's 21Shares.

What's next for crypto investors?

There are no guarantees, of course, that spot Ether ETFs will be approved in May. But given the similarity of the assets and the precedent set by the dozens of now-live Bitcoin ETFs, the likelihood of an SEC denial seems extraordinarily low with the proverbial crypto ETF floodgates already opened.

But with the May 23 deadline now less than three months away, analysts at both Bloomberg and Standard Chartered have mused in recent weeks that anticipation of the first Ether ETFs could spark a similar extended rally to what we saw leading up to the first Bitcoin ETF approvals. Considering the Bitcoin ETF hype cycle appeared to spark its own rally around three months prior to those approvals, it's no surprise we're now seeing increased speculation surrounding the potential Ether ETF approval timeline.

"The Ether spot [ETF] is tied to the hip of Bitcoin spot for sure," mused Bloomberg ETF analyst Eric Balchunas last month. "It's gonna go wherever it goes -- it's basically like on a 15-foot rope following it."

In the end, keep in mind these hype-based gains could be fickle over the short term. But there's obviously multiple billions of very real dollars each week flowing into crypto assets as the world steadily appears to be accepting it as a valid place to park capital. If that keeps happening, it will be no surprise to see the prices of major cryptocurrencies continue to rise accordingly.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.

Why Bitcoin, Ethereum, and Dogecoin Rallied on Tuesday was originally published by The Motley Fool