Bets on more Ether gains are intensifying following a surprise U.S. regulatory pivot toward allowing exchange-traded funds for the digital asset, even as questions swirl about the strength of demand for the products.

The shift by the U.S. Securities & Exchange Commission catalyzed a 26 per cent jump in the second-largest token in the seven days through Sunday, the biggest weekly advance since the 2021 crypto bull market, data compiled by Bloomberg shows.

Speculators may be taking heart from the record-breaking January debut of U.S. spot-Bitcoin ETFs, which have amassed US$59 billion in assets. But Ether is less well known than Bitcoin, making investor appetite for exposure harder to parse.

In addition, spot-Ether ETFs won’t partake in staking, the process of earning rewards by pledging tokens to maintain the Ethereum blockchain. The omission threatens to undercut interest in the funds compared with holding the tokens.

Further SEC approvals are still needed before issuers such as BlackRock Inc. and Fidelity Investments can launch products, for which the timeline is unclear. Ether rose about one per cent to $3,900 as of 8:38 a.m. Monday in London, while Bitcoin was little changed at $68,500.

“The risk in Ether remains to the upside and pullbacks are a buying opportunity,” Pepperstone Group Head of Research Chris Weston wrote in a note.

The charts below round up scenarios for Ether after its 71 per cent climb this year.

Bets on $5,000

The highest concentrations of bullish options bets signal some traders see Ether climbing to $5,000 or even higher, according to figures from the Deribit trading platform. The current spot-Ether record is $4,866 from November 2021.

Volatility ahead

The gap between the T3 Ether Volatility Index — which uses options prices to give a sense of expected 30-day swings in the token — and a similar gauge for Bitcoin is around the widest since at least the start of 2023. That indicates speculators expect bigger swings in Ether than in the largest digital asset.

Clues on demand

Some analysts view demand for futures hosted by Chicago-based CME Group Inc. as a window into U.S. institutional appetite for regulated crypto exposure. The level of open interest — or outstanding contracts — is increasing for CME Ether futures but is much smaller than for CME Bitcoin futures, suggesting less institutional engagement with Ether and perhaps, by extension, the prospective Ether ETFs.

“The relatively low participation from the same institutions that will probably be expected to pour into the Ether spot ETF upon launch, suggests that the initial inflows could be disappointing,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.