Developments in the Ethereum (ETH) options market appear to be expecting an ETH spot exchange-traded fund (ETF) in May. This was reported by Bitfinex derivatives analyst Jag Kooner in an interview with the American crypto news platform The Block. The final deadline for the American one is in May Securities and Exchange Commission (SEC) will make the decision on several Ethereum spot ETF applications.
Derivatives trading expects ETH to rise
Options are derivative contracts that give traders the opportunity to purchase an asset at a set price before a specified date. Derivatives contracts have built-in leverage and are therefore interesting for speculating traders. The derivatives market is also a good indicator of market sentiment.
Jag Kooner reports that additional call option contracts will be opened for March, April and May. According to the analyst, investors expect ETH price to rise ahead of a possible approval of an Ethereum ETF in the spring.
“Traders appear to be modifying their ETH options contracts in anticipation of May 23,” he saidalso Kooner.
On May 23, the SEC is due to decide on the Ethereum ETF applications from VanEck and ARK/21Shares. One of the expectations is that an ETH ETF will be approved because the Bitcoin ETFs have been approved. But it is not that easy. According to Kooner, Ethereum’s classification is crucial:
“The classification of ETH as a security or commodity is a significant factor influencing these predictions and the reaction of the derivatives market.”
Ethereum ETF hype?
Kooner also points out that he has taken a slightly more cautious stance since last week. This is probably related to the US Federal Reserve’s recent statements not to allow interest rates to be cut before May.
In anticipation of the Bitcoin spot ETF, the BTC price increased by around 100 percent from June 2023 to January 2024. If hype builds around a potential Ethereum spot ETF, ETH price could be in for a very good few months.
At the time of writing, Ethereum price is $2,423. ETH is currently in the green at 5.83 percent this week.
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