London and US Colour

• ETH spot prices sharply rebounded from a morning low of 3,400, with implied volatility notably rising to 65% in the front end.
• This strong bullish sentiment is supported by two developments:

1. The SEC is closing its investigation into Ethereum 2.0, ruling out any charges alleging that sales of ETH are securities transactions.
2. Prospective issuers of Ethereum ETFs are reportedly responding to SEC comments and aim to hand them back this week

• The options market has also reflected this optimism, with the desk observing heavy buying activity of top-side calls across various tenors
• Despite uncertainty around the reception of the ETH ETF, capturing 10-20% of Bitcoin ETF flows could propel ETH above 4,000, nearing its peak of 4,800.

Trade Idea
Given the market’s reactivity to the ETH ETF progress, digital options are appealing as a potential breakout strategy to capture profits on a move higher in ETH.

ETH 26-Jul 4,500 Digital
6.3x Payout if ETH spot price is above 4.5k at expiry

ETH 30-Aug 5,000 Digital
6.7x Payout if ETH spot price is above 5k at expiry

(Spot ref: 3,550)