Ethereum ETF Approval Could Spur 60% Rally as ETH Buying Increases

The market response following the approval of bitcoin Spot ETFs in early January was reflected in the forecast, according to the Singaporean firm. As a result, the price of bitcoin surged from around $42,000 to above $73,000 within just two weeks after trading began on Jan. 11, as indicated by CoinGecko’s data.

“Friday’s implied volatility exceeding 100% suggests significant market turbulence ahead, according to QCP. The DTCC’s listing of VanEck’s ETF indicates a high probability of approval, potentially leading to trading commencement as early as next week.”

Implied volatility reflects the market’s estimation of potential price swings for a given financial asset in the future.

On Wednesday, CryptoQuant, a firm specializing in on-chain crypto analysis, reported a surge in purchasing activity on centralized and decentralized cryptocurrency exchanges. Specifically, investors bought approximately 100,000 Ether units from the spot market on Tuesday – the most significant daily purchase since September 2023. This increase came as favorable news emerged and analysts raised their odds of this event occurring from 25% to over 75%.

As a financial analyst, I’ve noticed an intriguing development in the derivatives market. The open interest for ether-tracked futures reached a new peak of $14 billion, which represents approximately 67% of the total bitcoin open interest as of Wednesday. This proportion is significantly higher than usual.

According to CryptoQuant’s analysis, traders are currently purchasing more Ether than Bitcoin on a daily basis from permanent holders in the year 2024.

The influx of 62,000 Ether tokens into cryptocurrency exchanges marks the largest transfer since early March. This significant movement of Ether by investors could lead to price fluctuations in the near future, as extensive exchange activity tends to bring about market instability.

As a crypto investor, I’d put it this way: If the ETF application gets rejected, the analysts at the firm are predicting a substantial drop in prices.

This week, six entities, among them BlackRock, submitted revised versions of their proposed ethereum exchange-traded funds (ETFs). They eliminated the initial plan to stake the ether token, indicating that this action might have presented a regulatory challenge prior to today’s decision.

Locking up cryptocurrencies for a specified duration is called “staking.” This process plays a crucial role in maintaining the functionality of a blockchain network, and in return, stakers receive rewards. These rewards act as passive income sources for crypto investors.

Based on information from widely-used staking platform Lido, the estimated annual returns on ether staking had reached almost 3% by Thursday.