The Ethereum (ETH) options market is showing bullish signs on both the 30-day and six-month time frames as investors bet on a future price surge. Launch of US Spot ETH ETF.
Bullish sentiment suggests that a buy-on-rumor, sell-on-news event is unlikely. Such observations are More bullish sentimentThis could lead to Ether outperforming Bitcoin when the ETF launches.
Options Traders Bet Big on Ethereum Ahead of ETF Launch
Experts speculate that the much-anticipated spot Ethereum ETF in the United States will begin trading in mid-July. Ahead of the debut, options traders are already betting heavily on the price of Ethereum in anticipation of a big rally following the ETF’s launch.
Data reveals that Ether options market trends on Deribit, a leading BTC and ETH options and futures exchange, mirror the sentiment in the Bitcoin options market prior to the launch of the BTC ETF six months ago.
But there is one important thing to consider when making your decision. Ethereum’s direction after ETF launchCompared to Bitcoin’s market trends, the market is showing no signs of enthusiasm.
moreover, data Ethereum’s 30-day volatility skew is about 3%. By comparison, the options volatility skew is The difference between the market price and the strike price In option contracts.
The observed value of 3% suggests that traders are willing to pay more for call options, offering higher payouts to buyers over the next 30 days.
For context, a call option is a bullish bet that allows the holder to purchase the contract’s underlying asset at a specific price within a specific time period, while a put or call is a bearish bet.
Besides the 30-day term, Ethereum call options expiring within the next 180 days are trading at a proportional premium to puts, with the volatility skew hovering around 5%, suggesting that traders are looking to leverage their options positions ahead of the Ethereum ETF launch and in anticipation of Ethereum price growth over the next six months.
especially, Traders also adopted a similar strategy. Two weeks before the BTC ETF launch on January 11. During this period, Bitcoin’s 30-day volatility bias was 3.5%, and its 180-day bias hovered around 5%.
Any potential impact on Ether price?
The bullish sentiment among traders is due to the spot ETH ETF Raise billions of dollars Mainstream institutional investment in the Ethereum market.
moreover, data According to Far Side Investors, the Bitcoin ETF There was a net inflow of more than $14.6 billion. As of July 2, 2024. Investors are expecting similar results for the upcoming spot Ethereum ETF.
Analytics platform IntoTheBlock confirmed this in their latest episode. Weekly NewsletterThe firm said the upcoming Ethereum ETF will likely have a significant impact on the price of Ethereum as it attracts a new investor base.
Since Ethereum supply is concentrated in the hands of long-term holders, IntoTheBlock believes that if ETF inflows are as high as BTC ETF inflows, it could lead to a significant increase in Ethereum price.
But JP Morgan analysts share They offered a more pessimistic outlook in May, noting that Ethereum ETFs may only see $3 billion in net inflows this year, believing that Bitcoin has enjoyed first-mover advantage and saturated demand for other crypto assets with the approval of a spot BTC ETF.
Ilan Solot, co-head of digital assets at Marex Solutions, believes this pessimism could lead to Ethereum outperformance, but the prevalence of delta-neutral trading has blurred the comparison of ETH/BTC ETF inflows, he said in an email. Possible impact on price.
Ethereum (ETH) is trading at $3,309, down 4% in the past 24 hours, with the cryptocurrency shedding roughly 2% of its gains over the past seven days.
Disclaimer: Opinions expressed in this article do not constitute financial advice. Readers are encouraged to conduct their own research and determine their risk tolerance before making any financial decisions. Cryptocurrencies are a highly volatile and high-risk asset class.
