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The weekend brought another rally to the cryptocurrency market as investors speculated that a Bitcoin (BTC 7.05%)exchange-traded fund (ETF) could be imminent. And if one ETF is approved, there could be a flood of investors moving into the market.

Values are rising across the crypto industry, but the big names are advancing more than normal today. Bitcoin is up 5.6% from the market's close on Friday, Ethereum (ETH 3.37%) has gained 4.9%, Solana (SOL 1.08%) has gained 9.8%, and Dogecoin (DOGE 1.92%) has advanced 6.7%.

No Bitcoin ETF has been approved yet, but investors are positioning themselves for when that day comes. The theory is that an ETF will bring in new investors to crypto, including institutional investors who may not want to take on the custody risk of crypto but are interested in owning the assets.

There was a short period of time last week when investors thought a Blackrock Bitcoin ETF had been approved, and tokens jumped in value when that happened. This was more speculation than actual demand for Bitcoin, so the move didn't last.

There's also a filing deadline of tomorrow for Coinbase (COIN 5.56%) to provide an answer to the Securities and Exchange Commission's (SEC's) rebuttal to the company's motion to get a major enforcement action dismissed. The SEC says Coinbase is selling securities, which the company disputes, and Coinbase is trying to get the case thrown out.

It's no coincidence that Coinbase would be the custodian for some of the ETFs that have been applied for. The company has some of the most advanced infrastructure in the crypto industry, and besides offering exchange solutions for institutions, it's also providing solutions for ETFs.

If the case is dismissed, it's hard to see how the SEC could continue to hold back Bitcoin and other cryptocurrency ETF applications.

The crypto industry is still searching for regulatory clarity in the U.S., and ETFs have become a proxy for the industry's current position with regulators. Based on the major financial institutions now applying for Bitcoin ETFs, it certainly seems likely they are confident they will get approval.

If the Bitcoin ETF is approved, the floodgates could open to other tokens. Ethereum, Solana, and even Dogecoin could see new investors, including institutions, investing in ETFs. The market may be speculating on these approvals, and that's what's driving prices today.

I think the bigger impact of regulatory certainty would be increased investment in the crypto industry. The blockchain is fundamentally a technology that could drive new businesses and ways of performing contracts and storing information, but regulators need to ensure companies know what's legal and what isn't. That's why there's so much speculation on the current regulation.

Volatility will continue to be commonplace in crypto until we know the certainty of both ETFs and the SEC's stance on major tokens. I think we are seeing the industry move to more approvals, but battles may need to go to court, and certainty could still be years away.

Travis Hoium has positions in Coinbase Global, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, and Solana. The Motley Fool has a disclosure policy.

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Cryptocurrency Rally: Bitcoin and More Soar on New Hopes for ETF - The Motley Fool