Investment giant Fidelity has updated its application for a spot Ether (ETH) exchange-traded fund (ETF). The new filing shows that FMR Capital, an affiliate of Fidelity, invested $4.7 million to buy 1,250 Ether (ETH). This update was submitted to the United States Securities and Exchange Commission (SEC) on June 21.
Fidelity’s Investment in Ether ETF
Fidelity amended its Form S-1 Registration Statement, required for public sale investments. The new filing reveals that FMR Capital purchased 125,000 shares at $38 each to seed the fund’s basket with $4.7 million, which was used to buy 1,250 Ether. The price of Ether at the time was around $3,506.
No ETH Staking for Fidelity’s ETF
Fidelity also confirmed it will not engage in ETH staking. Staking was removed from the company’s initial proposal on May 21. The filing stated, “The Trust will not participate in the proof-of-stake validation mechanism of the Ethereum network (i.e., the Trust will not ‘stake’ its ether) to earn additional ether or seek other means of generating income from its ether holdings.”
SEC’s Rule Change and Approval Process
The SEC has approved a rule change that allows the listing and trading of eight spot Ether ETFs from major asset managers. These include VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise. However, these ETFs still need SEC approval for their S-1 forms before they can start trading.
Analyst Predictions for Ether ETF Filings
Bloomberg analyst Eric Balchunas expects more asset managers to update their Ether ETF filings on June 21. He predicts that the funds will debut on July 2. Balchunas wrote on X, “We will see a bunch of amended S-1s filed today, prob later this afternoon. Then ball’s in SEC’s court to let issuers know about any final changes and effectiveness (aka final approval). We holding the line with July 2nd as our over/under for eth ETFs launch date.”
Bitwise and Pantera Capital’s Involvement
Bitwise has also updated its proposal with the SEC. On June 19, Bitwise included a potential $100 million investment in the ETF from Pantera Capital upon its trading launch.
Hashdex’s Combined Bitcoin and Ether ETF Proposal
Hashdex, another asset manager, is seeking regulatory approval for a combined spot Bitcoin (BTC) and Ether ETF on the Nasdaq exchange. On June 18, Hashdex proposed this idea. Earlier, Hashdex had dropped plans to offer a sole Ether ETF.
Ethereum Options Data and Market Trends
Ethereum options data shows bears’ plan to keep ETH price under $3,600. On June 28, $4 billion worth of Ethereum options are set to expire. The balance of forces is centered around $3,500. Ether’s recent consolidation around this price has diminished the market’s expectation for a monthly options expiry above $4,000.
Monthly ETH Options Expiry
A total of $3.5 billion in monthly ETH options is scheduled to expire on June 28 at Deribit, the leading exchange. This is followed by $286 million at OKX and $142 million at Binance. However, as the SEC continues to review the S-1 filings from ETF providers, the likelihood of bullish bets surpassing $4,000 remains low.
Impact of SEC Chair Gary Gensler’s Confirmation
Ether bulls did not anticipate the delay between the regulatory approval of the spot ETF and its actual trading commencement. SEC Chair Gary Gensler confirmed this uncertainty. This delay has weakened the momentum for optimistic bets for the June 28 options expiry.
Conclusion of SEC Investigation into Ethereum
Ether bears were surprised after a major regulatory concern for investors was addressed on June 19. The SEC concluded its investigation into whether Ether could be classified as a security. This decision means Consensys is no longer under scrutiny for potential ETH sales.
Open Interest for June 28 Options Expiry
The open interest for Deribit’s June 28 monthly options expiry stands at $3.5 billion. However, the actual outcome is expected to be lower. Prices above $4,000 and below $3,000 are seen as unrealistic.
Put-to-Call Ratio and Market Scenarios
The 0.62 put-to-call ratio indicates an imbalance between the $2.2 billion call (buy) open interest and the $1.3 billion put (sell) options. If Ether’s price stays around $3,500 at 8:00 am UTC on June 28, only $257 million worth of these put options will be relevant. This discrepancy happens because the right to sell Ether at $3,300 or $3,400 becomes irrelevant if ETH trades above these levels at expiry.
Bulls’ Target and Potential Gains
Below are the four most likely scenarios based on current price trends. The balance of potential gains for each side is outlined as follows:
- Between $3,200 and $3,400: There are 13,000 calls versus 97,200 puts. The net result favors the put options by $280 million.
- Between $3,400 and $3,600: There are 43,900 calls versus 41,600 puts. The outcome is approximately balanced between call and put options.
- Between $3,600 and $3,800: There are 104,200 calls versus 24,400 puts. The net result favors the call options by $300 million.
- Between $3,800 and $3,900: There are 141,600 calls versus 9,600 puts. The advantage for call options increases to $500 million.
This rough calculation assumes that call options are used primarily for bullish bets and put options for neutral-to-bearish positions. However, this simplification does not account for more intricate investment strategies.
Unless there is an unexpected approval of a spot ETF before June 28, the likelihood supports a balanced result around $3,500. This should be viewed as a victory for the bears, especially considering that Ether was trading above $3,800 just two weeks prior.
