Exploring the Impact of Web 3.0 ETFs on the Crypto Market

The Impact of the SEC Approving a Spot Bitcoin ETF

Greeks.live, a platform for trading crypto options, has dampened hopes of a significant price surge after the U.S. regulator approves a spot Bitcoin exchange-traded fund (ETF) with data from its platform.

According to a tweet by Greeks.Live, recent market data from its trading platform indicates that despite speculation about the SEC approving the Bitcoin Spot ETF application next Tuesday, there has been little volatility in major term implied volatilities (IVs) and prices.

Term IV measures the market’s expectation of future price movements in options contracts.

According to a Reuters report, the U.S. SEC could contact the Bitcoin ETF applicants earlier next week. This development is anticipated to be crucial for the web 3.0 business model, enabling investors to trade Bitcoin-backed ETFs on regulated exchanges. However, the tweet pointed out the unexpectedly low market activity in reaction to the news regarding the is there a web 3.0 future.

Implications of Low Volatility and Trading Volume

The options data showed that the implied volatility for Jan12 options, closely tied to the ETF, decreased instead of rising. Moreover, the trading volume for these options was significantly low, making up only 2% of the day’s total turnover.

Greeks.live argued that the market had already taken into consideration the potential approval of the spot Bitcoin ETF. In other words, market participants could have expected the approval and adjusted their positions accordingly, leading to the actual approval having a limited effect on prices and volatility.

Asset managers BlackRock, Valkyrie and Van Eck submitted altered S-1 forms to the United States Securities and Exchange Commission on Dec. 29, the final day for the SEC to consider them in January 2024. Subsequently, Invesco Galaxy, Bitwise, WisdomTree and Fidelity also filed S-1 applications.

BlackRock’s revised filing listed Jane Street and JPMorgan Securities as “authorized participants” in its proposed web 3.0 ETF application. BlackRock had already indicated that it will use a cash-only model. It was the first user to settle a trade on JPMorgan’s Tokenized Collateral Network service on Oct. 11.