Here’s how the Crypto market reacted to Ether ETF approvals: Bitfinex

Last week was a memorable one for the crypto community. Four months after approving similar products for Bitcoin, the United States Securities and Exchange Commission (SEC) has given the green light to the first wave of space Ethereum exchange-traded funds (ETFs).

According to the latest Bitfinex Alpha report, the crypto market's reaction to the event was akin to a rollercoaster due to the events surrounding its approval. Both bitcoin (BTC) and ether (ETH) have experienced high volatility and sudden price movements as anticipation for the SEC ruling builds.

Increasing the chances of approval

It started last week with market analysts increasing the probability of approval from 25% to 75%. The sudden change in sentiment is reflected in key metrics such as Bitcoin Volmex Implied Volatility Index (BVIV), Ethereum Volmex Implied Volatility Index (EVIV) and volatility risk premiums (VRPs) for crypto assets.

These BVIV and EVIV rose to 64 and 85.5 respectively, while Bitcoin VRP and Ethereum VRP rose to 16 and 34 before falling to 10 and 30 respectively.

Before the tide turned for Ether ETF approvals, the crypto market was in a state of volatile volatility and relative stability following the Bitcoin halving on April 19. During this period BVIV and EVIV decreased from 75 to 55 and 80 to 63 respectively. . Similarly, the VRPs of Bitcoin and Ethereum fell to 1.5 and 8.5 respectively.

As the Fed's May 1 meeting approaches, investors' concerns about possible interest rate changes have again dragged down BVIV, EVIV and VRPs. At this time, the VRPs for Bitcoin and Ethereum were as high as 13 and 29.2, respectively. However, the market calmed down after the Fed meeting.

Results of the SEC decision

When the SEC finally approved the Ethereum ETF on May 23, BVIV and EVIV fell from 64 and 85.5 to 52.5 and 69.5 within hours. The Bitcoin and Ethereum VRPs were not left out, as they fell to 7 and 18, respectively.

The change in the market was accompanied by a decrease in the price of BTC and ETH, which increased to $ 71,000 and $ 3,900 before the approval due to movements in the eternal futures market. After the initial excitement of the SEC's decision, investors started to realize their profits, which pushed the prices of cryptocurrencies even lower.

At the time of writing, BTC and ETH were trading at $68,000 and $3,871 after falling 1% in the last 24 hours.