over 2 years ago • 1 min
Last week we saw the launch of the first US bitcoin exchange-traded fund (ETF) which attracted more than $1 billion in investor inflows. Those inflows pushed the ETF to buy futures contracts that track the price of bitcoin and that, in turn, pushed the price of bitcoin to an all-time high.
Now traders are banking on a repeat scenario for ether – the world’s second-biggest cryptocurrency – and that’s sent its price to a record high of $4,361 last week. But traders are betting that the cryptocurrency’s price will more than treble by March next year, with the catalyst being a US ether ETF launch early next year.
That analysis comes from Adam Farthing, chief risk officer for Japan at crypto specialist trading firm B2C2. Farthing said that buying interest has “exploded” in ether call options expiring in March 2022 with a $15,000 strike price. These call options give their investors the right (but not the obligation) to buy ether for $15,000 in March next year, and traders would only invest in them if they expect ether to be worth more than $15,000 by then.
If those expectations turn out to be true, and assuming bitcoin remains flat, then ether will steal the crown of the world’s biggest cryptocurrency. But there’s one problem: there’s a lot less trading volume in ether futures contracts compared to bitcoin, meaning launching an ETF that invests in ether futures is still a big challenge – for now at least…
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