ETH May Expiration Options Implied Volatility Increasingly High...ETF Approval Debate Impact

Ruslan Lienkha, market analyst at crypto exchange and lender YouHodler, said, "The implied volatility of Ethereum (ETH) options expiring in late May is increasing. This suggests that options traders are expecting significant volatility around the $3,600 strike price," analyzed Ruslan Lienkha. "This is likely to be accompanied by significant volatility around that price point in the spot market. The SEC's approval of an ETH spot ETF and whether or not a new issue occurs could fuel this volatility."

Meanwhile, the SEC is expected to respond to VanEck's request for approval of an ETH spot ETF by May 23, followed by Ark-21 Shares' application for an ETH spot ETF by May 24, and Hashdex's proposal by May 30.

"It's doubtful that the applicants will sue if the SEC declines to approve an ETH spot ETF," Bloomberg ETF analyst Eric Balchunas told X. "A lot of people have been saying that Grace's proposal is a bad idea," he said. "While many believe that ETH spot ETF applicants like Grayscale will sue if the SEC denies approval, ETH futures ETFs have only 4% of the assets of BTC futures ETFs. It's doubtful that issuers will invest a lot of time and money in this endeavor when they can only profit from a fraction of the assets."

Another altcoin spot ETF debater is Brad Garlinghouse, CEO of Ripple, who said in a recent interview at Blockchain Week in Paris, France, "I think there could be a spot ETF in the U.S. that tracks cryptocurrencies other than Bitcoin as an underlying," he said. However, he added: "Altcoin ETFs could emerge, but it could be a long time before they hit the market. This is due to the SEC's aggressive stance on cryptocurrencies. In the US, BTC and all other cryptocurrencies run the risk of being classified as securities. XRP has achieved the same legal clarity as BTC through legal battles. This clarity makes it more likely than other altcoins that we will see an XRP spot ETF."