Deribit Ethereum Options Contracts Set to Expire
Ethereum (ETH) options contracts with a strike price of $2,550 are set to expire on Friday. There are over 24,600 outstanding contracts worth more than $62 million at this price, even as the ETH’s price is $2,541.79 ahead of an exchange-traded fund (ETF) approval deadline in May.
The large volume of contracts reflects market sentiments around the potential approval of ETFs that track the price of ETH directly.
ETH ETFs May Not Live Up to Expectations
The market expects the ETH price to rise to $2,900 on March 29, 2023, and $5,000 by June, following the first wave of anticipated ETF approvals in May 2024. A call option gives a contract holder the right, but not the obligation, to buy an underlying asset before or on the contract expiration date.
Before the US Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs last week, Ethereum investment products saw a healthy inflow of funds. Corporate products saw inflows of $29 million in the first week of January.
Bullish signals for the network include advancements in scaling and the push toward cheaper transactions made possible by proto-danksharding. In the meantime, several so-called rollups, blockchains that expand Ethereum’s throughput, are set to grow in diversity and number in 2024.
ETH Price Bullish For the Medium Term
Some commentators think markets are getting ahead of themselves in predicting overly bullish prices for Ethereum. However, some expect ETH to outperform Bitcoin in the medium term.
“We expect ETH to continue outperforming BTC over the medium term as the narrative rotates to potential ETH Spot ETF approvals.”
But the SEC’s approval of a spot Ethereum ETF is not just a formality. As a network, Ethereum is arguably more centralized than Bitcoin and offers staking yields that could be considered securities.
Bitcoin bull Michael Saylor opined that ETH is a security because a few core developers can change its properties. On the other hand, people want to keep Bitcoin’s properties the same.
Hot Take: Impact of ETH Options Expiry on Price and ETF Outlook
The expiry of ETH options contracts may have an impact on the ETH price and the outlook for ETH ETFs. With a large volume of contracts set to expire, market sentiments around potential ETF approvals are being reflected. The market expects the price of ETH to rise following the anticipated ETF approvals in May 2024. However, some commentators believe that markets may be overly bullish in their predictions for Ethereum’s price. The approval of a spot Ethereum ETF is not guaranteed and there are concerns about Ethereum’s centralization and staking yields being considered securities. Overall, the expiry of these options contracts will be an important event to watch for both ETH traders and those interested in ETH ETFs.
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