ETF Fever Spreads to Ethereum as Big Money Bets Roll In

The cryptocurrency market is buzzing with optimism as major financial institutions rush to capitalize on the soaring demand for exchange-traded funds (ETFs) based on digital assets. Following the surge in applications for spot Bitcoin ETFs, attention is now shifting towards Ethereum futures ETFs. This article explores the latest developments and market sentiment surrounding these sought-after investment opportunities.

In mid-June 2023, a wave of optimism swept through the crypto community as financial giants such as Fidelity Investments, BlackRock, WisdomTree, and others applied for spot Bitcoin ETFs. Investors were eager to gain exposure to the burgeoning digital asset market, prompting these institutions to make their moves.

Is the tide changing now?

Giants Eye Ethereum ETFs

As the demand for cryptocurrency-based ETFs continues to rise, several financial powerhouses are now setting their sights on launching ETFs for Ethereum futures. Among those seeking approval are notable names like Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale. These institutions are keen to tap into the potential of Ethereum’s futures contracts traded on the Chicago Mercantile Exchange (CME).

Eric Balchunas, a senior ETF analyst at Bloomberg, took to X (formerly Twitter) to reveal the details.

This move follows the successful launch of the country’s first leveraged Bitcoin futures ETF, the 2x Bitcoin Strategy ETF (BITX), which seeks to provide double the daily excess return of the S&P CME Bitcoin Futures Daily Roll Index.

Market Sentiment

Despite the optimism surrounding Ethereum ETFs, there have been recent withdrawals of Ether filers with the SEC. However, Volatility Shares remains confident, bolstered by the success of the 2x Bitcoin Futures ETF.

In the past 24 hours, Ethereum’s price experienced a 2% surge, rebounding from earlier pressure exerted by sellers. As of now, ETH is trading at $1,858.05, boasting a market cap of $223 billion.

Ethereum Options

Despite the recent price increase, Ethereum options data reflects a negative bias for the cryptocurrency’s price action over the next six months. According to Amberdata, the six-month call-put skew for Ether currently stands at -0.91, the lowest since June 15.

A negative skew indicates a preference for put options, which grant the buyer the right, but not the obligation, to sell the underlying asset at a predetermined price on or before a specific date. Put buyers are essentially bearish on the market, while call buyers are bullish.