Ethereum still above $3,600 on hopes of ETF approval

Ethereum took a big leap last night and early this morning following reports that the Securities and Exchange Commission (SEC) has asked spot ETF applicants to file revised 19b-4 filings.

A 19b-4 filing is a filing that companies use to propose rule changes to the SEC. In this case, the applicant would need the regulator to change the rules to allow the Ethereum spot ETF to be traded on the exchange.

When this happened to spot Bitcoin ETF applicants last January, the industry was just days away from historic approvals for all 11 spot Bitcoin ETFs. Of course, there is no guarantee that things will proceed the same way as they did then. However, sentiment surrounding this week’s deadline took a huge turn and sent ripples through the market.

As of this writing, the price of Ethereum remains above $3,600, with trading volume up 219% in the past 24 hours, according to Coinglass.

Stablecoin Open Dollar founder Joseph Schiarizzi commented: on twitter Last night, Ethereum increased its market capitalization (now $439 billion) by half that of its Ethereum competitor, Solana, in three minutes.

Delegate Labs and Clusters founder Foobar noted on Twitter that the price surge created the largest ETHUSD daily candle in history, rising from $3,070 to $3,661.

Meanwhile, open interest, or outstanding ETH futures contracts, increased 26% over the past day to $15 billion. And according to Coinglass, call options opened by optimistic traders who think the price of an asset will rise outnumber put options by almost 2:1.

There is currently $3 billion worth of open interest in Ethereum options expiring at the end of May and June.

Potential approval, or at least a step further, has left analysts wondering how the SEC could give approval while also engaging in a legal battle over ETH’s securities status.

“If the speculation about the SEC’s 180 for an Ethereum ETF is true, I suspect they are attempting to thread a needle between ‘ETH’ as a non-security and ‘ETH as staked’ (or, more clumsily, as ‘ETH staking as a service’). ‘) as security,’ Alex Thorn, head of research at Galaxy Digital, wrote on Twitter.

Just a month ago, Ethereum software giant Consensys filed a lawsuit against the SEC over its attempts to regulate ETH like a security. According to court documents in the case, a leaked internal memo from the SEC revealed that the regulator had considered Ethereum a security for more than a year.

If the SEC approves trading of a spot Ethereum ETF, Singapore trading firm QCP Capital expects ETH to quickly close the gap to $4,000 and rise to $5,000 by the end of this year.

“⁠If not approved, we can expect an ugly move back to 3K,” the company wrote in a blog post. “This uncertainty has led to higher volatility, but spot futures basis with current yields back above 10% may be a better deal.”

(Disclosure: Consensys is one of Decrypt’s 22 investors)