- Volatility Shares leveraged Ethereum ETFs have officially launched for trading on the Cboe.
- Ethereum options implied volatility surpasses Bitcoin as investors anticipate launch of spot ETH ETFs.
- Ethereum could see a new all-time high of around $5,000 following the official launch of spot ETH ETFs.
Ethereum (ETH) sustained its sideways trend again on Tuesday following the launch of Volatility Shares leveraged ETH ETFs and an increase in implied volatility across ETH options.
Daily digest market movers: Leveraged ETH ETFs increase Ethereum implied volatility
Ethereum surpassed Bitcoin in a key derivatives metric on Tuesday.
The 2x Ether ETF (ETHU) launched on Tuesday after the Security & Exchange Commission’s (SEC) approval as Fox Business’s Eleanor Terrett confirmed. The ETF, which is the first leveraged Ethereum ETF in the US, will track twice the price performance of futures ETH.
"Like our 2x Bitcoin ETF (BITX), ETHU may pave the way for 1x spot ETFs in the near future," said company cofounder Stuart Barton in an interview with Eleanor Terrett.
Also read: Ethereum sustains week-long consolidation, sees over $3 billion exodus from exchanges
Volatility Shares is one of the largest holders of Bitcoin futures contracts at the Chicago Mercantile Exchange (CME) after launching a Bitcoin 2x fund in June 2023. With ETHU's launch, many have speculated that the SEC will likely approve spot ETH ETFs S-1 registration statements in the coming weeks.
Meanwhile, according to QCP Capital, Ether options are experiencing high implied volatility compared to Bitcoin as the anticipation surrounding the launch of spot ETH ETFs is causing prevailing bullish sentiment among investors.
Implied volatility indicates how much the market expects the price of an option to change within a given timeframe.
"This bullishness is likely to continue as the market waits for the ETH spot ETF to usher in new demand. The options market certainly reflects this, with ETH vols still trading 15% over BTC vols," said QCP analysts.
ETH technical analysis: Ethereum to set new all-time high in next major move
Ethereum's horizontal trend is gaining strength daily as it continued moving sideways, trading at $3,796 on Tuesday. The consolidation has also seen a decline in ETH liquidations, with long liquidations at $6.33 million and shorts at $4.08 million.
With derivatives data indicating bullishness, ETH is unlikely to experience any major decline. The $3,618 level may prove crucial in case of a potential dip.
ETH/USDT 8-hour chart
ETH's next major move will likely follow an upward trajectory to break the $4,093 resistance. Considering ETH's current consolidation, it may see a major rally to a new all-time high of around $5,000 if or when the SEC gives the go-ahead for spot ETH ETFs' official launch.
Also read: Ethereum price lags, investors potentially reallocating capital after BlackRock's updated S-1 filing
ETH options data also aligns with this prediction, with several June call options hovering around the $5,000 level. The bullish thesis will be invalidated if ETH falls below the $3,301 key support.
Ethereum FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Michael Saylor predicts Bitcoin to surge to $100K by year-end
MicroStrategy's executive chairman, Michael Saylor, predicts Bitcoin will hit $100,000 by the end of 2024, calling the United States (US) election outcome the most significant event for Bitcoin in the last four years.
Ripple surges to new 2024 high on XRP Robinhood listing, Gensler departure talk
Ripple price rallies almost 6% on Friday, extending the 12% increase seen on Thursday, following Robinhood’s listing of XRP on its exchange. XRP reacts positively to recent speculation about Chair Gary Gensler leaving the US Securities and Exchange Commission.
Bitcoin Weekly Forecast: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin (BTC) surged up to 16% in the first half of the week, reaching a new all-time high of $93,265, followed by a slight decline in the latter half. Reports suggest the continuation of the ongoing rally as they highlight that the current trading level is still not overvalued and that project targets are above $100K in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.