Ether Options Pre-ETF Trend Similar to BTC with One Key Distinction
The imminent launch of U.S. exchange-traded funds (ETFs) directly investing in Ether (ETH) is anticipated to kick off trading activities in mid-July. Preceding this debut, the trends observed in the Ether options market on Deribit are closely resembling the sentiments witnessed in Bitcoin (BTC) options leading up to the BTC ETFs introduction six months ago, with a notable discrepancy that could hold significance for traders.
At present, Ether’s 30-day options skew, which gauges traders’ willingness to pay for an asymmetric payout in either the upward or downward direction, is holding steady at around 3%, as reported by Amberdata. This positive value indicates a preference for call options, offering buyers an asymmetric payout in the upward direction over the subsequent four weeks. Conversely, a put option signifies a bearish outlook. Furthermore, Ether calls due in six months are trading at a premium compared to puts, with the skew hovering around 5%.
Traders are strategically utilizing options to position for potential strength in Ether leading up to the ETF launch and over the ensuing six months, akin to the approach taken approximately two weeks before BTC ETFs commenced trading on January 11. During early January, BTC’s 30-day and 180-day skews were approximately 3.5% and 5%, respectively.
The current bullish stance in the Ether market aligns with expectations that spot Ether ETFs, facilitating exposure to the asset without ownership, will tap into substantial mainstream institutional demand amounting to billions of dollars. Notably, BTC ETFs have attracted net inflows exceeding $14 billion to date, according to Farside Investors.
Analytical insights from IntoTheBlock’s weekly newsletter highlight the potential impact of the forthcoming ETH ETF launches, projecting a substantial influence on ETH due to the influx of new investors. The concentrated supply of ETH among long-term investors could magnify the effect of ETF inflows, should they be proportionally significant relative to Bitcoin’s.
As the Ether market remains cautiously optimistic, contrasting with the euphoric sentiment surrounding Bitcoin in January, the case for a sell-the-fact pullback may be less compelling. Ether’s decline from $4,000 to $3,350 since late May, coupled with uncertainties surrounding the demand for Ether ETFs compared to Bitcoin ETFs, suggests a more subdued market mood. Analysts at JPMorgan anticipate potential net inflows of $3 billion into Ether ETFs this year, hinting at a tempered outlook.
Despite prevailing pessimism, some experts, like Ilan Solot, senior global market strategist at Marex Solutions, suggest that this sentiment could pave the way for Ether to outperform expectations. The prevalence of delta-neutral trades may, however, complicate predictions and potentially overestimate the impact on prices.
In conclusion, as the market gears up for the Ether ETF launches, the nuanced dynamics of the options market indicate a cautious yet optimistic stance among traders, setting the stage for potential price movements and market reactions in the coming months.
