Ethereum Faces High Volatility Amid ETF Decision Deadlines, Expert Warns

The implied volatility of Ethereum options expiring at the end of May indicates significant price fluctuations due to uncertainties surrounding the approval of a spot ETF. This was reported by Ruslan Lienkha, Head of Markets at YouHodler, to The Block.

The publication noted that May 23 marks the final deadline for the SEC to decide on VanEck’s application. Similar deadlines for proposals from ARK/21Shares and Hashdex are expected on May 24 and 30.

“Options show a significant increase in volatility around the $3600 strike level. Exceeding this mark on the spot market could be accompanied by heightened price fluctuations. The implied volatility curve may be adjusted by new facts or SEC rhetoric,” commented the expert.

Cryptocurrency derivatives trader Gordon Grant noted a decrease in the metric for April contracts compared to those expiring in May. According to his observations, after a sharp rise in Ethereum in previous days, they have leveled out.

“It seems that the May valuation is not excessively high in terms of the so-called calendar butterfly compared to adjacent months,” explained the specialist.

In Grant’s view, market participants have increased short positions on April options in anticipation of maintaining or reducing levels of implied volatility due to limited price fluctuations in the spot market.

Earlier, Bloomberg analyst Eric Balchunas halved the probability of a spot ETH-ETF approval in May—from 70% to 35%. GSR estimated the chances at 20%.

In April, VanEck and CoinShares CEOs Jan van Eck and Jean-Marie Mognetti expressed doubts about the imminent registration of the product.

JPMorgan analyst Nikolaos Panigirtzoglou has expressed belief in the eventual approval of a spot exchange-traded fund based on Ethereum by the regulator.