Bitcoin has been on a remarkable run, surpassing its November 2021 peak and setting new highs. This surge has had a ripple effect across the market, driving positive sentiment. Analysts are optimistic about Ethe’s future. Ethereum, the second-largest cryptocurrency, surged from $2,200 in January to $4,000 by mid-March, signaling a rapid start to the year.
With such momentum, is reaching $5,000 on the horizon? Let’s find out.
Data from decentralized options exchange Lyra Finance paints an optimistic picture. With a 20% chance of Ethereum reaching $5,000 by June’s end, traders are clearly bullish. Their enthusiasm is evident in the surge of call options (bets on rising prices) purchased at the $5,000 strike price and above.
The SEC’s Potential Game Changer: The ETF Effect
ETH would need to rise by about a third from its current price of around $3,740 to reach $5,000. This optimism is largely driven by speculation that the U.S. Securities and Exchange Commission (SEC) will approve spot ETH exchange-traded funds (ETFs), which has already caused a more than 20% surge in ETH prices this week.
On a bullish note, Nick Forster, Lyra’s founder, highlighted that the approval of an ETH ETF will have a bigger impact on ETH price, even more than the effect seen with Bitcoin. ETH’s market cap is currently about one-third of Bitcoin’s before its ETF was priced in. This potential approval is expected to increase trading volumes and attract more activity in the options market, as traders position themselves for market volatility without the risk of liquidation.
The Options Market Speaks: Investors Betting Big on Ethereum
Lyra is a prominent decentralized platform for trading spots, perpetual, and options, having registered significant trading volumes. Interestingly, traders on Lyra accurately predicted Bitcoin’s first-quarter rally to near $70,000.
Investors are betting big on Ethereum’s price surge, favoring call options over puts, especially for options expiring in June and beyond. Following the SEC’s call for filing amendments, Deribit saw a surge in trading volumes and volatility for ether options and futures, reaching a record $12.5 billion in trading volume in the past 24 hours.
A Look at the Bigger Picture
Notably, Ethereum’s future price depends a lot on Bitcoin’s journey. If Bitcoin reaches $150,000 by 2025, as some predict, Ethereum could rise to $7,500. This estimation is based on Ethereum’s market cap ratio to Bitcoin’s, indicating a $900 billion market cap for Ethereum. Considering its circulating supply, this could lead to a $7,500 price.
The $5,000 Finish Line: A Realistic Target?
So, while $5,000 might seem ambitious, it’s quite possible. If regulatory challenges are minimized and ETH ETFs come into action, Ethereum could realistically hit $5,000 by June.
Also Check Out : Top Analyst Predicts Ethereum Price To Surge $5000, Here What You Need To Know?
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