Ether gains 17% as ETF regulatory progress drives surge in Polymarket approval opportunities

The U.S. Securities and Exchange Commission (SEC) has asked exchanges to update their 19b-4 file for Ether ETFs to show approval progress, although approval is still not guaranteed. Ether (ETH) rose 17% to more than $3,600 due to favorable regulatory developments, increasing the likelihood of ETF approval. The CoinDesk 20 index, which tracks the largest digital assets, also rose nearly 8 percent on positive regulatory developments for the Ether ETF.

At the start of the Asian Business Day, Ether was trading above $3,600, up 17 percent. The "yes" side of various Polymarket contracts also rose sharply on the news. CoinDesk 20, an indicator of the performance of the largest digital asset on the market, rose nearly 8 percent.

Before the close of Business Day in the United States, CoinDesk reported that the SEC had made leaps and bounds on Ethereum ETF approval, requiring exchanges to update their 19b-4 dossier for Ethereum ETFs, indicating potential progress. However, despite the progress on the 19b-4 filing, the SEC could still reject the S-1 registration statement for the Ethereum ETF, delaying its approval and the start of trading.

As a result of this important development, the Ether implied volatility curve - which shows the market's expectations of future volatility between different strike prices and expiration dates - gradually smoothed, with 25-delta risk reversals reaching annual highs of more than 18%, while traders heavily purchased $4,000 call options expiring on May 24 and May 31, 2024. Analysts at Presto Research noted in a note to CoinDesk.

A Polymarket contract asking if an ether ETF would be approved by May 31 rose from 10 cents to 55 cents, representing a 55 percent chance of approval. Another Polymarket contract asked if it would be approved by June 30 and is currently trading at 68 percent. For VanEck's proposed Ethereum ETF, the latest decision date is May 23, while Ark's is May 24.

These positive regulatory developments have injected new vitality into the ether market, boosting the confidence of market participants, causing the price of ether and its related contracts to rise significantly, while also highlighting the strong demand and expectations for crypto asset ETFs in the market.

This regulatory development has made the approval of an ether ETF a focal point of market discussion, and investors are closely watching subsequent developments. At the same time, the change in risk reversal data also shows that the market is gradually optimistic about the price trend of ether, and the trend of layout investment in advance is becoming more and more obvious.

In summary, this wave of Ethereum price increases has been accompanied by regulatory news, highlighting the speed and sensitivity of the crypto market to changes in the regulatory environment. The next few days will be a critical period to see how these changes ultimately affect the market, especially the latest developments and market reactions related to ETF approval.