Key Points
- The implied volatility in ether options surpasses that in bitcoin options, indicating possible price swings due to speculated spot ETFs launch.
- The anticipation of spot ether ETFs is currently driving the cryptocurrency market, as evidenced by the higher implied volatility in ether options.
The increased implied volatility observed in ether (ETH) options compared to bitcoin options suggests that traders are predicting heightened price movements for ether. This could be in response to the speculated rollout of spot ETH exchange-traded funds (ETFs), analysts have noted.
Market Anticipation of Spot Ether ETFs
A report from QCP Capital on Tuesday reflected that the current major influencer in the cryptocurrency market is the anticipation of the launch of spot ether ETFs. This is evident in the higher implied volatility of ether options compared to bitcoin’s. Implied volatility, in this context, is the market’s prediction of potential price movement for ETH.
Analysts from QCP Capital stated, “The market is likely to remain bullish as it awaits the spot ether ETF to stimulate new demand. This expectation is clearly mirrored in the options market, with ether vols [IV] still trading 15% over bitcoin vols.”
Ether Options Implied Volatility Surpasses Bitcoin’s
This observation is consistent with data indicating that the current levels of implied volatility for at-the-money (ATM) ether options have stayed high since the U.S. Securities and Exchange Commission (SEC) approved spot ether ETFs on Thursday, May 23.
Contrarily, the Deribit Volatility Index, which gauges the market’s forecast of future volatility for bitcoin over the next 30 days, shows that bitcoin’s implied volatility has significantly fallen since mid-May.
Despite the SEC’s approval of spot ether ETFs in mid-May, unlike bitcoin ETFs that started trading the day after approval, ether ETFs might not begin trading on exchanges for a few weeks or even months.
Ether’s price slightly dropped by 1.3% over the past 24 hours and was trading at $3,762 at 7:57 a.m. ET. The GM 30 Index, which represents a selection of the top 30 cryptocurrencies, also decreased by 0.34% to 145.09 during the same period.
