Ethereum spot ETF approval may drive ETH up 60%

Author: Shaurya Malwa, CoinDesk; Compiler: Deng Tong, Golden Finance

• The U.S. approval of a spot Ethereum exchange-traded fund (ETF) could lead to a sharp rise in the value of the token, reflecting the market reaction to the Bitcoin ETF.

• In the two weeks after the Bitcoin ETF began trading, the price of Bitcoin rose from $42,000 to over $73,000.

• Both centralized and blockchain-based exchanges saw heavy buying activity after the Ethereum ETF decision was made.

QCP Capital said on Telegram on Thursday that the U.S. approval of a spot Ethereum (ETH) exchange-traded fund (ETF) could drive the second-largest cryptocurrency up 60% in the coming months.

The Singapore-based company said the forecast echoes the market reaction after the approval of a spot bitcoin ETF in January. In the two weeks after the ETF began trading on January 11, bitcoin rose from $42,000 to more than $73,000, according to Coingecko data.

"With implied volatility exceeding 100% on Friday, the market is looking forward to the ETF," QCP said. 

Implied volatility measures the market's expectations of future price fluctuations in a financial instrument.

Buying activity increased on both centralized and blockchain-based cryptocurrency exchanges, on-chain analytics firm CryptoQuant said in a report on Wednesday. On Tuesday, as reports of a favorable decision emerged, holders bought more than 100,000 ETH in the spot market, the highest single-day level since September 2023, with some analysts raising the probability of purchases to more than 75% from the previous 25%.

On Wednesday, Ethereum holder inflows broke through the 100,000 mark, the highest daily flow since September. (CryptoQuant)

Open interest in Ethereum-tracking futures surged to a record $14 billion. That accounted for 67% of bitcoin open interest as of Wednesday, an unusually high level.

Trading activity at the institutional-favored Chicago Mercantile Exchange also increased, with a record $2.85 billion in notional volume in Ethereum futures traded on Tuesday, a spokesperson said. Ethereum options volume hit a record 1,135 contracts ($216 million).

“Traders appear to be more invested in ETH right now relative to Bitcoin,” CryptoQuant said.

Ethereum prices could see volatility in the coming days after investors sent 62,000 ETH to the exchange, the most since early March, the report said. “High exchange flows are typically associated with price volatility.”