Ethereum Surpasses Bitcoin in Options Market Volatility

The market remains bullish, anticipating a surge in demand in the United States following the final approval of spot Ethereum ETFs, according to analysts at QCP Capital.

3/ 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.

— QCP Capital (@qcpcapital) June 3, 2024

Experts observe that implied volatility in the options market indicates positivity. On June 3, Ethereum surpassed Bitcoin by 15% in this metric, according to Deribit.

The significant divergence in volatility began after May 23, when the U.S. Securities and Exchange Commission (SEC) approved the 19b-4 forms in applications from issuers for spot ETH ETFs.

QCP Capital noted that the market is becoming “stubbornly optimistic,” considering the negative narrative about the potential Mt.Gox sell-off and the hack of the DMM Bitcoin exchange for $305 million in Bitcoin.

“Another reason for the persistent bullish sentiment is that speculators are increasing long positions in other major cryptocurrencies in anticipation of approval [for them] of spot exchange-traded funds in the near future,” the analysts added.

At the time of writing, the second-largest cryptocurrency by market capitalization is trading at $3784, having declined by 1.2% over the day.

Earlier, Deribit’s commercial director Luuk Strijers suggested a decline in the implied volatility of Bitcoin and Ethereum. He warned that a “sleepy market could be caught offside.”

From May 23 to June 2, the total exchange balance of ETH decreased by 797,000 ETH ($3 billion).

Arthur Cheong, founder and CEO of DeFiance Capital, predicted Ethereum could reach $4500 even before the ETF launch.