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LONDON, May 21 (Reuters) - Ether was set for its largest two-day gain in nearly two years on Tuesday amid speculation about the outcome of applications for U.S. spot exchange-traded funds that track the world's second-biggest cryptocurrency, while bitcoin also approached a record high.

Ether , which underpins the ethereum blockchain network, was 8% higher on the day at $3,775, its highest in two months, after jumping 13.8% on Monday.

Top cryptocurrency bitcoin was last up 2.2% at $71,000, around 4% shy of its March peak of $73,803.25. The U.S. markets watchdog will give its ruling on some spot ether ETF applications this week. Analysts and investors said Tuesday's jump was a result of unconfirmed talk that the U.S. Securities and Exchange Commission might approve these products, after investors had previously thought they would be rejected.

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%. "Ethereum has taken pole position in the latest crypto rally ahead of Thursday's first final SEC deadline to decide on an ETH ETF," said Ben Laidler, global markets strategist at eToro, using ether's market ticker.