Ethereum ETF Approval Imminent: Has Market Euphoria Already Priced in the Rally?

Ethereum ETF Approval Imminent: Has Market Euphoria Already Priced in the Rally?

As the U.S. Securities and Exchange Commission (SEC) approaches a critical decision on spot Ethereum ETFs, the cryptocurrency market is experiencing a fresh wave of optimism. Following the successful launch of Bitcoin spot ETFs in early 2024, which attracted tens of billions of dollars in inflows, the Ethereum ETF is seen as the next milestone. However, with the historical pattern of "buy the rumor, sell the news" playing out repeatedly, has the current market euphoria already exhausted the short-term upside? This article analyzes the situation from three perspectives: SEC approval progress, on-chain data, and the options market.

I. SEC Approval Progress: From Silence to Signals

According to sources, the SEC has recently held "technical meetings" with multiple applicants, including asset management giants like BlackRock and Fidelity, to discuss specific product design details. Although the SEC has not yet provided a clear approval timeline, market expectations suggest that if the compliance framework for Bitcoin ETFs can be smoothly transferred, the probability of Ethereum ETF approval has risen from 30% at the start of the year to over 60%. Notably, SEC Chair Gary Gensler avoided directly commenting on Ethereum's security status during a recent congressional hearing but emphasized that "any digital asset ETF must meet investor protection requirements under the Securities Act of 1933." This statement is interpreted as: approval is not impossible as long as applicants meet conditions such as custody and market surveillance.

II. On-Chain Data: Inflows and Profit-Taking Coexist

According to CoinGecko data, the number of active addresses on the Ethereum network has increased by approximately 15% over the past 30 days, reaching its highest level since May 2022. Meanwhile, Ethereum balances on exchanges continue to decline, indicating that investors are moving tokens to cold wallets or staking contracts, which is typically seen as a bullish signal. However, on-chain analytics firm Glassnode reports that the realized profit ratio for short-term holders (holding period < 155 days) has risen above 0.8, approaching historical highs. This suggests that many investors who bought recently are now in profit, and any market turbulence could trigger a wave of selling.

III. Options Market: Implied Volatility Surges, Hedging Demand Spikes

According to Deribit data, the implied volatility (IV) for Ethereum options has jumped from 65% to 85% over the past week, hitting a three-month high. The IV for at-the-money options expiring on June 28 has even exceeded 100%. This phenomenon indicates that traders are pricing in significant volatility following ETF approval—whether upward or downward. Notably, the put/call ratio has risen from 0.4 to 0.6, suggesting that some institutional investors are buying protective puts to hedge against a "sell the news" correction. An analyst at a market maker noted: "The current market pricing already incorporates an 80% probability of approval. If the final result falls short, ETH could face a 15-20% correction."

IV. Historical Precedent: Lessons from Bitcoin ETF Performance

Looking back at the market performance after the Bitcoin spot ETF approval: On January 10, 2024, the day of approval, Bitcoin briefly broke above $48,000 but then fell about 12% over the following two weeks, only to stabilize and begin a new rally in March. This pattern of "pricing in expectations, then selling the fact" is common in the cryptocurrency market. Ethereum's current price (around $3,800) has already risen nearly 60% since the start of the year, partly reflecting ETF optimism. If Bitcoin's script is any guide, Ethereum may experience a "short-term spike followed by a pullback, then mid-term consolidation" after approval.

V. Comprehensive Assessment: Short-Term Correction Risks Cannot Be Ignored

In summary, the approval of an Ethereum ETF is undoubtedly a long-term positive, providing compliant exposure for traditional capital and driving the institutionalization of the Ethereum ecosystem. However, in the short term, market sentiment is already in the "extreme greed" zone (according to the Alternative.me Fear and Greed Index, currently at 78), on-chain profit-taking is accumulating, and hedging costs in the options market are high. These signals all point to growing correction risks. Investors should be wary of short-term volatility when the news is announced, as the market may enter a "sell the news" phase following the official approval announcement.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile, and ETF approval outcomes are uncertain. Investors should make decisions based on their own risk tolerance. Past performance does not guarantee future results; do not blindly chase gains or panic sell.