Get ready for a shake-up in the crypto world!
Spot ether exchange-traded funds are anticipated to begin trading in the US this year, stirring up expectations of heightened volatility in the price of Ether compared to Bitcoin.
Could Ether become more volatile than Bitcoin? Will the price skyrocket or plummet? Dive deeper to find out what experts are saying and how this could impact your crypto portfolio.
Since April, the 30-day implied volatility index for ether (ETH DVOL) has shown a notable increase relative to bitcoin (BTC DVOL). This growing spread, now at 17%, indicates that investors are bracing for more significant price swings in ether.
As of June 19, Ethereum is valued at $3,525.26. Over the past 30 days, it has appreciated by 15.5%, with a 7-day change of +0.8% and a 24-hour change of +3.2%. Starting the year at around $2,350, Ethereum climbed past $4,000 on March 11 but subsequently dipped.
It regained momentum in late May, surpassing $3,880 on May 27. Recently, its price has been fluctuating between $3,700 and $3,450.
Bitcoin ETFs, launched in January, have attracted nearly $15 billion from investors, initially causing BTC’s price to surge. This rally has since slowed down, with experts noting that most ETF inflows are from arbitrage strategies, not outright bullish bets. This cautious approach may also apply to ether ETFs.
The term structure for ether shows higher expected volatility across all time frames compared to bitcoin. Despite this, open interest in ether futures on the Chicago Mercantile Exchange remains significantly lower than in bitcoin futures—$1.6 billion versus almost $10 billion. This disparity suggests that ether has not yet garnered the same level of institutional acceptance as bitcoin.
According to JPMorgan, ether ETFs might only attract $3 billion in net inflows this year.
The introduction of spot ether ETFs is expected to amplify market volatility for ether. While there is considerable excitement surrounding this development, the actual investor response remains uncertain. Investors and market analysts alike are watching closely to see how the launch of these ETFs will impact the ether market.
Also Read: Crypto Analyst Predicts Ethereum Dominance to Surpass 20% by Year-End
The ride for ether could get bumpy as spot ETFs take flight. Will you be ready for the volatility?
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