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Cryptocurrency traders are keeping an eye on Ether’s record, volatility rising amid hype over US ETFs
Bets on further Ether gains are intensifying following a surprise U.S. regulatory shift toward allowing exchange-traded funds for the digital asset, even as questions swirl about the strength of demand for the products.
The move by the U.S. Securities & Exchange Commission catalyzed a 26% jump in the second-largest token in the seven days through Sunday, the biggest weekly advance since 2021’s cryptocurrency bull market, data compiled by Bloomberg.
Read more: US Leads Way for Ether ETFs in Testing Demand Beyond Bitcoin
Speculators may take heart from the record January debut of spot Bitcoin ETFs in the United States, which amassed $59 billion in assets. But Ether is less well known than Bitcoin, making it more difficult to analyze investors’ appetite for exposure.
Additionally, spot-Ether ETFs will not participate in staking, the process of earning rewards by pledging tokens to maintain the Ethereum blockchain. The omission threatens to reduce interest on the funds compared to holding the tokens.
Further SEC approvals are still needed before issuers such as BlackRock Inc. and Fidelity Investments can launch products, for which the timing is unclear. Ether was stable at $3,890 as of 7.43am on Tuesday in Singapore, while Bitcoin fell to $69,308.
“Risk in Ether remains on the upside and pullbacks are a buying opportunity,” Chris Weston, head of research at Pepperstone Group, wrote in a note.
The charts below summarize the scenarios for Ether after its 70% rise this year.
He bets on $5,000
According to data from trading platform Deribit, the highest concentrations of bullish options bets signal that some traders see Ether rising to $5,000 or even higher. Ether’s current spot record is $4,866 as of November 2021.
Volatility ahead
The gap between the T3 Ether Volatility Index – which uses options prices to give a sense of expected 30-day swings in the token – and a similar indicator for Bitcoin is the widest since at least early 2023. This indicates that Speculators expect bigger swings in Ether than in the largest digital asset.
Clues on request
Some analysts see the futures demand hosted by Chicago-based CME Group Inc. as a window into U.S. institutional appetite for regulated crypto exposure. The level of open interest – or contracts outstanding – is increasing for CME Ether futures, but is much lower than for CME Bitcoin futures, suggesting less institutional commitment to Ether and perhaps, by extension, potential ETFs on Ether.
“The relatively low participation from the same institutions that are likely to flock to the Ether spot ETF at launch suggests that initial inflows may be disappointing,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.
This article was generated from an automated news agency feed without modifications to the text.
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