- Major financial institutions including Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale have submitted applications for Ethereum futures ETFs.
- Despite the pressure on Ethereum’s price and bearish predictions from options data, these finance giants’ focus on Ethereum ETFs sparks optimism for the cryptocurrency’s return to a valuation of $4,000.
Following an optimistic flurry in the crypto community sparked by BlackRock and its peers’ spot Bitcoin ETF applications in mid-June 2023, attention has shifted, with Ethereum now in the limelight. Major players in the finance arena, such as Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale, are eagerly exploring Ethereum futures ETFs.
Now VanEck has just filed for an Ether Futures ETF. That makes three and counting.. bc when it rains (crypto ETF filings) it pours. pic.twitter.com/5wr0JmrLkd
— Eric Balchunas (@EricBalchunas) August 1, 2023
The Growing Embrace of Ethereum ETFs
Volatility Shares spearheaded the movement in their SEC filing on July 28, outlining their proposition for the Ether Strategy ETF. Rather than making direct investments in Ether, they proposed investing in cash-settled Ether Futures contracts traded on the CME (Chicago Mercantile Exchange). This move, following the launch of their successful 2x Bitcoin Strategy ETF (BITX), marks an evident shift towards Ethereum.
In response to this new ETF proposal, Bloomberg’s senior ETF analyst Eric Balchunas shared on Twitter,
“Interesting given SEC made some recent Ether filers withdrawal. But… VolShares just got (against the odds) a 2x Bitcoin Futures ETF out so maybe they [are] feeling confident [the] time is right.”
A Ray of Optimism Amid Price Fluctuations
Ethereum (ETH) has been showing promising signs, with its price increasing more than 2% in the last 24 hours. After a plunge following Bitcoin’s recent drop to $29,000, Ethereum’s price fell below $1,900 but has seen a minor resurgence, currently trading at $1,860 with a market cap of $225 billion.
Despite Ethereum options data suggesting a bearish outlook for ETH price action over the next six months, the increasing interest in Ethereum futures ETFs has sparked a glimmer of hope. The six-month call-put skew for Ether, indicative of the difference between the implied volatilities of call and put options expiring in 180 days, has reached its lowest point since June 15, as per Amberdata. This data implies a preference for put options and a bearish market sentiment, yet the applications for Ethereum futures ETFs indicate a contradictory and bullish outlook on Ethereum’s future.
The current landscape presents a complex picture: on the one hand, market data suggests bearish sentiment; on the other hand, the major finance institutions’ growing interest in Ethereum indicates a bullish outlook. The outcome hinges on the interplay between these contrasting trends, suggesting the possibility of Ethereum regaining its previous heights, potentially reaching the $4,000 mark.