The cryptocurrency space has picked up momentum in recent sessions amid hopes that a spot Bitcoin (CRYPTO: BTC) exchange-traded fund will soon receive regulatory approval. The top two cryptocurrencies in terms of market capitalization, namely Bitcoin and Ethereum (CRYPTO: ETH), took off early Sunday.

What Happened: Bitcoin, which closed above $39,000 level on Saturday for the first time since early May 2022, advanced further on Sunday. After opening at $39,472.21, the apex crypto rose to an intraday high of $39,726.74 at around 9 a.m. and has since squandered some of the gains.

At last check, Bitcoin traded up 2.42% to $39,766.50, according to Benzinga Pro data. The upside has also been accompanied by heavy volume, which saw a 25% increase over the past 24 hours. The crypto is up about 140% for the year.

The apex crypto is closing in on the psychological resistance of $40,000, and the last time it closed above the level was in late April 2022.

Ethereum, the second biggest crypto, was also surging higher Sunday morning. It last traded up 2.69% at $2,161.40.

See Also: How To Buy Bitcoin

What's Driving Upside: Expectations of rate cuts by the Fed have been perceived as a positive for speculative assets such as cryptocurrency. Cash waiting on the sidelines could come flooding back into the market and find its way into risky bets.

Additionally, a host of firms, including BlackRock, WisdomTree and Valkyrie, among others, are waiting on the SEC to vet their respective spot ETF applications. An approval for the first ETF could come as early as early 2024. A spot Bitcoin ETF wwould allow investors to invest directly in the apex crypto.

"For ETF investors, this would be the best product on the market ... All the other options right now have flaws to varying degrees," said Bryan Armour, director of passive strategies research for North America at Morningstar, CNBC reported.

Read Next: What Is Spot Bitcoin ETF

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