ETH Purchasing May Rise 60% with ETF Approval
The U.S. approval of spot ether ETFs might boost the token's value, similar to the effect seen with bitcoin ETFs. Bitcoin rose to over $73,000 from $42,000 in the two weeks after the ETF started trading on January 11.
"With Friday implied volatility above 100%, the market is expecting fireworks," warned QCP. The DTCC has listed VanEck's ETF, and we believe clearance is imminent, with trade anticipated next week. Implied volatility quantifies the market's prediction of financial instrument price changes.
On-chain analytics company CryptoQuant reported on Wednesday that centralized and blockchain-based crypto exchanges saw an increase in buying activity. Holders acquired over 100,000 ETH in spot exchanges on Tuesday, marking the largest day volume since September 2023. This surge occurred as word of a positive ruling spread, and experts raised the probabilities of approval to above 75% from 25%.
Wednesday saw the greatest daily ether influx since September at 100,000 ETH, according to CryptoQuant. Open interest on ether-tracked futures reached a record $14 billion, which is 67% of bitcoin's open interest on Wednesday, an extraordinarily high figure. The Chicago Mercantile Exchange, preferred by institutions, saw ether futures trade a record $2.85 billion on Tuesday. Additionally, ether options exchanged a record 1,135 contracts, totaling $216 million.
CryptoQuant noted that traders are now more exposed to ETH than to Bitcoin. "The largest daily spot buying from ETH permanent holders so far in 2024," they said. Investors contributed 62,000 ETH to exchanges, the largest since early March, which might affect ether prices. "High exchange flows usually cause price volatility."
The firm's analysts predicted a “significant price correction” if the ETF proposal is rejected. Six issuers, including BlackRock, amended their ether ETF proposals this week. $ETH
