While it's too early to talk about a speculative cryptocurrency rally like the ones Bitcoin (BTC) has historically offered, something is definitely going on. Just yesterday (Monday), the price of the oldest cryptocurrency surged 15%, testing its highest levels since May 2022, or in 17 months.

Along with the rising price, investor expectations and dreams are also soaring, with some already mentally cashing in above-average profits. The fear-of-missing-out (FOMO) sentiment is also making a definitive comeback in the bull market.

Bitcoin Priced at $35,000: Who Will Bid Higher?

During Tuesday's Asian trading session, Bitcoin momentarily surged to test the $35,200 level, marking its highest point not only this year but also since May of the previous year. Although the price has slightly retreated from this peak, it's important to note that Bitcoin has successfully broken free from the consolidation phase it had been locked in for over a year. As of now, it remains comfortably above the $34,000 mark.

Moreover, technical indicators suggest that bulls are in control for the first time in a while. Not only has Bitcoin's price seen a significant increase, but its "dominance," or total share in the market capitalization of all digital assets, has also risen. On Tuesday, it reached 52%, the highest since April 2021.

Meanwhile, trading volumes exploded, reaching nearly $30 billion in 24 hours, and Bitcoin futures funding rates hit record highs, indicating panic buying from investors wanting to get a piece of the action. The full-blown FOMO has returned to the markets.

Even though the Relative Strength Index indicates that Bitcoin is "significantly overvalued," Twitter is filled with posts competing in forecasts about how far the cryptocurrency's price will go.

"The current optimism surrounding the leading cryptocurrency can be largely attributed to insights provided by a Morgan Stanley report, suggesting that the so-called 'crypto winter,' which has concerned investors, might be approaching its end," commented Walid Koudmani, the Chief Market Analyst at XTB.

While Koudmani is likely correct, it's not the only reason for the gains.

Bitcoin ETF Reignites Investor Imagination

We all remember how the news that BlackRock would apply to create the first spot Bitcoin ETF triggered euphoria in the cryptocurrency markets just a few months ago. Now, speculation about the imminent approval of this financial instrument has once again captured investors' imagination.

BlackRock has taken another step toward launching a spot ETF product and has begun the "seeding" process. As Eric Balchunas from Bloomberg admitted, this is usually a good sign that brings the ETF closer to launch.

Additionally, the planned BlackRock iShares Bitcoin Trust has been listed on the Depository Trust & Clearing Corporation (DTCC), which clears NASDAQ trades. The instrument will be available under the symbol IBTC.

Some industry representatives, however, remain cautious optimists. Among them is David Lo, the Head of Financial Logics at Bybit, who believes that one cannot be 100% certain about the future of the BTC ETF acceptance process. He thinks "there is the potential for GBTC holders and various bankruptcy estates to sell Bitcoin, which could put downward pressure on prices."

According to Lo, the market is returning to a normalized trading environment. However, the price may enter another broad trading range, between $31,000 and $40,000.

Bitcoin to Become a $900 Billion Market

The news has gone viral across the broad market of digital assets, influencing the price of Ethereum (ETH), the second-largest cryptocurrency by market capitalization, to reach its highest levels since August. One ETH is currently trading hands for over $1,800. In after-hours trading, shares of cryptocurrency companies like Coinbase and MicroStrategy are also seeing strong gains. Additionally, the stock prices of cryptocurrency miners have shot up; for example, Hut 8 has increased by over 12%.

"The total cryptoasset market will grow by $1 trillion if the bitcoin spot ETF gets approval, data analytics firm CryptoQuant has claimed," eToro commented in today's note. "The firm has estimated that if the issuers that have applied to list bitcoin ETFs put just 1% of their Assets Under Management into the ETF, circa $155 billion could enter the market."

This would elevate Bitcoin's market capitalization by nearly one-third, pushing it to a valuation back to $900 billion.