On May 20, the price of Ether (ETH) surged over 18% after Eric Balchunas, a senior analyst at Bloomberg, raised the approval odds for the Ethereum exchange-traded fund (ETF) from 25% to 75%. Balchunas noted that the United States Securities and Exchange Commission likely faced political pressure, as their previous position showed little engagement with ETF applicants.
Source: Eric Balchunas
Balchunas further mentioned that the SEC is reportedly asking exchanges like the NYSE and Nasdaq to update their filings, although there has been no official confirmation from the regulator. Nonetheless, Nate Geraci, co-founder of the ETF Institute and president of the ETF Store, stated that the final decision is still pending regarding the registration requirement for individual funds (S-1s).
Source: Nate Geraci
According to Geraci, the SEC could approve the exchange rule changes (19b-4s) separately from the fund’s registration (S-1), which could technically be delayed beyond the May 23 deadline for VanEck’s Ethereum spot ETF request. This allows the regulator additional time to review and approve these documents, considering the complexities and risks associated with structures involving Proof-of-Stake (PoS) cryptocurrencies.
Analyzing the impact on the upcoming $3 billion ETH options expiry
The impending decision on the spot Ethereum ETF has significantly heightened interest in the weekly and monthly ETH options expiries. At Deribit, the leading derivatives exchange, Ether options open interest for May 24 is recorded at $867 million, while for May 31, it reaches an impressive $3.22 billion. In comparison, CME’s monthly ETH options open interest stands at just $259 million, with OKX at $229 million.
The call-to-put ratio at Deribit heavily favors the call (buy) options, indicating that traders have been more active in purchasing them than the put (sell) options.
Deribit May 24 ETH options open interest, in ETH terms. Source: Deribit
If Ether’s price stays above $3,600 on May 24 at 8:00 a.m. UTC, only $440k of the put instruments will be involved in the expiry. Essentially, a right to sell ETH at $3,400 or $3,500 becomes…
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