Key Points
- Ethereum [ETH] maintains bullish momentum with high options market volume.
- Views diverge on demand for non-staking ETH ETFs.
Ethereum [ETH] has managed to recover its losses from March to May and has been hovering around $3,800 for the past two weeks. Some speculate that this could be the calm before a surge in price due to the introduction of spot ETH ETFs.
Ethereum’s Bullish Expectations
QCP Capital, a crypto trading firm based in Singapore, has noted that the volume of ETH’s options market surpasses that of Bitcoin [BTC], indicating a bullish outlook for ETH. The market is awaiting the introduction of the ETH spot ETF, which is expected to stimulate new demand. The options market reflects this anticipation, with ETH vols trading 15% over BTC vols.
MacroCRG, an X user, has observed that ETH trends higher when the US Dollar Index (DXY) weakens. Both Bitcoin and ETH have an inverse correlation with the DXY, meaning a weakening DXY often triggers a rally for ETH and BTC.
ETH ETF Demand Factor
Many market observers anticipate significant demand for ETH from spot ETH ETFs. However, opinions differ, particularly after spot ETH ETFs eliminated the staking option. Some argue that choosing a non-staking spot-ETH ETF carries an ‘opportunity cost.’
David Hoffman of Bankless disagrees, suggesting that traditional finance cares less about this than about gaining exposure. He believes the addition of staking will provide a ‘second wind for flows.’ ARK Invest, a potential issuer, withdrew from the ETH ETF party, stating it would continue to explore efficient ways to provide investors with exposure to this innovative technology in a way that maximizes its benefits.
Mike Novogratz of Galaxy Digital predicts that staking could be permitted within two years of the ETH ETF launch, which could trigger a ‘second wind for flows.’ A weakening DXY could potentially enhance ETH’s short-term price action ahead of the spot ETH ETFs launch. However, how demand will evolve after the launch of the ETH ETFs remains uncertain.
