STORY: Ether, the world's second-biggest cryptocurrency, was set for its largest two-day gain in nearly two years on Tuesday on optimism that spot exchange-traded funds for the digital asset may soon be approved.

Ether was up more than 8% on the day at nearly $3,780, after jumping almost 14% on Monday.

Top cryptocurrency bitcoin also rose, now just 4% shy of its March peak of over $73,800.

The U.S. Securities and Exchange Commission is set to rule on the spot ETF applications this week.

Analysts and investors said Tuesday's crypto gains were a result of unconfirmed talk that the regulator might approve them.

Investors had previously thought they would be rejected, given that the SEC had not engaged with the exchanges and issuers who had filed the applications.

But in a surprise move, SEC officials on Monday asked the Nasdaq, Chicago Board Options Exchange and the New York Stock Exchange to quickly make updates and changes to their filings, requests which usually precede approval, according to Reuters sources.

Bitcoin rallied sharply earlier this year after the SEC gave approval to several spot bitcoin ETFs, which have seen billions of dollars in inflows.

So far in 2024, bitcoin has gained 67%, but ether is now close behind, with a gain of 60%.