Derive Predictions Update: February 10th 2025
February 10, 2025 By Nick Forster
Forecasts
The options markets are pricing in a 15% chance of ETH reaching over $5.5K by the end of the year, up from 14% last week, and a 20% chance it falls below $1,700, which is down from 22% last week.
We expect ETH's monthly implied volatility (IV) to stay in the 65-70% range, as no major announcements are expected this week.
For BTC, the chances of it reaching $200K by December 26 have risen slightly to 12%, up from 11% last week. Additionally, there's a 15% chance of BTC exceeding $135K by the end of Q2, up from 14%.
As for SOL, we're predicting an 18% chance it hits $300 at the end of Q1, with a 10% chance of surpassing $360. Conversely, there's a 20% chance of SOL dipping below $160 at the end of Q1."
Prediction: ETF filings will continue to generate buzz but will have minimal impact in the short term.
There’s some exciting news for SOL holders as the SEC has acknowledged Grayscale’s filings for SOL and LTC ETFs. This development sets a deadline for the SEC to make a decision by October 11. However, ongoing litigation regarding the status of SOL as a security means that SOL ETFs are unlikely to be traded until late in the year, or even early next year.
This timeline delay means we won’t see a significant influx of institutional flows into SOL until this is resolved.
We’re also seeing a variety of other ETF petitions in the market, such as CBOE’s filing for an XRP ETF (backed by Bitwise and WisdomTree), along with DOGE ETFs from Rex Shares and Bitwise. Unlike SOL, the DOGE ETFs have the potential to be listed by mid-Q2, possibly sparking a revival in meme coins.
Prediction: ETH upgrades will be slowly priced into the market, providing a solid opportunity for ETH bulls.
The ETH Foundation is stepping up its efforts as ETH’s market share has fallen to 10%, down from 17% last year. But even with this dip, there are promising signs of recovery on the horizon.
ETH’s recent network upgrade to increase the maximum gas per block by 20%, from 30M to 36M, will enhance transaction processing speed and reduce costs – essentially promoting more usage on the network. Additionally, the upcoming Pectra upgrades set for testing this month and implementation in March, will significantly boost scalability, reduce fees, and improve user experience. Features like ERC-20 token gas payments, account abstraction, and transaction batching will lower transaction costs and make the network more efficient, benefiting both traders and stakers.
Meanwhile, the ETH Foundation’s recent transfer of 50,000 ETH (worth about $130M) into a multisig wallet signals their intention to actively participate in DeFi, further supporting the growth of the ecosystem. With ongoing filings from CBOE BZX and NYSE to list ETH spot ETF options, ETH could see more institutional involvement, following BTC's success with ETF options, which has smoothed out volatility.
With these upgrades and developments in play, ETH remains a solid long-term play for bulls.