The entire crypto world has been shaken, in a positive way, by recent developments around yesterday's approval of certain exchange-traded products. For Bitcoin Cash (BCH -3.02%), Ethereum Classic (ETC -1.59%), and Litecoin (LTC -0.17%), broadly positive sectorwide sentiment appears to be a key driver behind these tokens' impressive moves higher. As of 2 p.m. ET, these three tokens have rocketed 13.9%, 34.3%, and 6.3%, respectively, over the past 24 hours.

The approvals of 11 spot Bitcoin exchange-traded funds (ETFs) yesterday by the Securities and Exchange Commission (SEC) has undoubtedly led to significant interest across the cryptocurrency sector today. Much of today's increase can be attributed to expectations that institutional capital will flow into this sector in dramatic fashion. In fact, projections from some analysts peg the impact of these approvals at around $100 billion. That's a win not only for Bitcoin, but for investors considering this entire space, as it legitimizes crypto for institutional and retail investors alike.

Let's dive into what's behind the specific moves in these three cryptos today, over and above the obviously bullish headline news dominating the market right now.

Why are these three tokens surging today?

For Bitcoin Cash, a peer-to-peer electronic cash system tied closely to Bitcoin, today's news is obviously a net positive for this network. However, there are other key drivers supporting Bitcoin Cash's recent performance. News that cryptocurrency payments have surged to a record high in 2024 is very bullish for the likes of Bitcoin cash and other payments-focused cryptocurrencies. A report on Jan. 10 cited that nearly 1.3 million Bitcoin transactions were reportedly processed in 2023 alone, bringing the total number of Bitcoin transactions to more than 4 million. For those bullish on crypto as a payments facilitation technology, this is a strong catalyst to consider for Bitcoin Cash.

For Ethereum classic, the proof-of-work fork of the Ethereum blockchain, excitement around the potential approval for spot Ethereum ETF approvals appears to be driving interest in this adjacent token. Essentially, investors and traders appear to be speculating on a potential hard fork for Ethereum Classic, which would better align the network with Ethereum's, and improve its outlook (if Ethereum surges as a result of ETF approvals, one could argue Ethereum Classic could be due for a rally as well). Of course, such a substantial move of more than 30% may be overdone, so this will certainly be a token traders focus in on in the coming days.

Litecoin's more muted rise today appears to be tied more to sector-specific tailwinds than anything else. Largely viewed as a Bitcoin and Ethereum alternative, this is a token that typically rides the tides higher and lower over specific time frames. Right now, there's a rising tide lifting most boats in this sector, and Litecoin investors are certainly pleased to see momentum taking this token higher over the past 24 hours.

Is this momentum sustainable?

Ultimately, we'll have to see if these spot ETF approvals are a "sell the news" event, or a strong catalyst that puts a floor beneath crypto prices for the foreseeable future. In many respects, we won't know which outcome will materialize until after the fact. Thus, some amount of hesitation may lead to a waiting period for certain long-term investors, and could present an opportunity for buyers considering these tokens to jump in and ride momentum higher over the medium term.

Overall, I think yesterday's spot ETF approvals are a bullish catalyst for the sector. For one, these approvals legitimize crypto as an asset class institutional investors can buy into. Another key factor driving sectorwide interest is the flurry of institutional capital expected for large-cap cryptos. Accordingly, for those seeking exposure to these trends, and looking for less-visible (and potentially higher-upside) ways to play crypto, these three tokens will likely continue to be in focus in the coming weeks.