- The SEC has approved options trading for BlackRock, Fidelity, and Bitwise spot ETH ETFs.
- The approval could attract more ETH investments and potentially lead to new ETF launches.
- Staking on ETH ETFs might be approved as early as May or August, despite the October deadline.
- The lack of staking approval has been cited as a reason for the lukewarm performance of spot ETH ETFs compared to BTC ETFs.
- ETH price surged 10% following President Donald Trump’s 90-day pause on tariffs, but sentiment remains negative.
The SEC’s Greenlight for ETH ETF Options Trading
The U.S. Securities and Exchange Commission (SEC) has given the greenlight for options trading on spot Ethereum (ETH) ETFs, a move that could potentially attract more investments into the asset. The approval applies to BlackRock’s ETHA, Bitwise’s BITW, and Fidelity’s FETH. According to Nate Geraci of ETF Store, this development is expected to lead to a flurry of new ETF launches, including covered call strategy ETH ETFs and buffer ETH ETFs.
The SEC’s decision is seen as a positive step towards increasing investor interest in ETH. However, Bloomberg analyst James Seyffart noted that the outcome was “100% expected” due to the deadline for the SEC’s decision, implying that the market had already priced in the approval. Nevertheless, the approval is still a significant development, as it could pave the way for increased institutional investment in ETH.
The Impact of Staking Approval on ETH Demand
The approval of staking on ETH ETFs is expected to have a more significant impact on ETH demand and value, particularly from institutional investors seeking the extra 3% annual yield. Some analysts believe that the lack of staking approval has contributed to the lukewarm performance of spot ETH ETFs compared to BTC ETFs. Since their debut, ETH ETFs have recorded $2.3 billion in cumulative inflows, a far cry from the $35 billion in total inflows recorded by spot BTC ETFs.
The disparity in performance between ETH and BTC ETFs has been attributed to various factors, including the lack of staking approval. If staking is approved, it could potentially boost ETH demand and value, especially among institutional investors. Bloomberg analyst James Seyffart noted that staking approval could come as early as May or August, despite the October deadline.
Assessing the Price Impact of the SEC’s Decision
The SEC’s approval of options trading for ETH ETFs did not have an immediate impact on ETH’s price, as the asset had already priced in the outcome. However, ETH’s price did surge 10% from $1400 to $1600 on April 9, following President Donald Trump’s 90-day pause on various tariffs. The price upswing was accompanied by a notable spike in market interest, as revealed by the new high in April’s Social Volume.
Despite the positive price action, sentiment remains negative, and a sustainable recovery for ETH is uncertain. On the 4-hour price chart, ETH has a bullish RSI divergence, which could signal a potential recovery. However, the momentum can only be confirmed if the On Balance Volume (OBV) clears the overhead hurdle (trendline resistance).
The Road to Recovery for ETH
In the short term, ETH’s price could stall near the 50EMA ($1600), as it did in the past few days. However, a decisive move and improved trading volume above the hurdle could push it higher. The long-term recovery of ETH might hinge on a positive macro shift and the approval of ETH ETF staking. If staking is approved, it could potentially boost ETH demand and value, especially among institutional investors.
Conclusion
In conclusion, the SEC’s approval of options trading for ETH ETFs is a positive development that could attract more investments into the asset. However, the lack of staking approval has been cited as a reason for the lukewarm performance of spot ETH ETFs. The approval of staking could potentially boost ETH demand and value, especially among institutional investors. As the market continues to evolve, a positive macro shift and the approval of ETH ETF staking could be crucial in driving a sustainable recovery for ETH.
