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Ethereum (ETH) ETF Buzz Attracts Traditional Finance Interest: Report

Summary:
“Tradfi” may be beginning to rotate into the ETH ETF trade after two months. As per a new report by Reflexivity Research, the annualized basis on CME has consistently increased, reaching over 18%. Bitcoin’s open interest in CME has also experienced continuous growth, surpassing .5 billion since the trend began two months ago. Notably, an interesting pattern has emerged when comparing CME activities between Bitcoin and Ethereum. Velo Data’s analysis reveals that the futures’ basis for Ethereum on CME is currently trading at a 5% premium compared to Bitcoin, exceeding 20%. Furthermore, the open interest for ETH on CME has started to rise, albeit lagging behind Bitcoin’s initial surge. While it may be premature to confirm, there are indications that “tradfi” could be

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“Tradfi” may be beginning to rotate into the ETH ETF trade after two months.

As per a new report by Reflexivity Research, the annualized basis on CME has consistently increased, reaching over 18%. Bitcoin’s open interest in CME has also experienced continuous growth, surpassing $4.5 billion since the trend began two months ago.

Notably, an interesting pattern has emerged when comparing CME activities between Bitcoin and Ethereum.

  • Velo Data’s analysis reveals that the futures’ basis for Ethereum on CME is currently trading at a 5% premium compared to Bitcoin, exceeding 20%.
  • Furthermore, the open interest for ETH on CME has started to rise, albeit lagging behind Bitcoin’s initial surge.
  • While it may be premature to confirm, there are indications that “tradfi” could be initiating a shift towards the ETH ETF trade after a two-month period.
  • Similarly, the Grayscale discount is narrowing, dropping below 10% for the first time since July 2021. This decrease is indicative of growing demand for Bitcoin exposure and speculation regarding the potential approval of a Bitcoin ETF, along with the transformation of GBTC’s trust structure into an ETF.
  • The report also noted a parallel trend in Grayscale’s ETHE product, as its discount to NAV is now below 15%.
  • Meanwhile, the implied volatility in the options market has consistently decreased amid the gradual upward movement of both Bitcoin and Ethereum.
  • However, there has been a slight increase in volatility for 1-week and 1-month periods during the recent rapid price surge.
  • With volatility now below 60%, it may be considered attractive for an asset that typically trades up to 80% volatility and seems to be awakening from a period of dormancy.

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