Ether Gains Popularity over Bitcoin: Key Metrics Reveal

• Ethereum Gains Traction as Bitcoin Slows Down
• Comparing Performance: Bitcoin vs Ether
• Money Flowing Into Ether Futures
• Ether and Bitcoin CME Futures Pricing
• Shift in Options Market

Ethereum Gains Traction as Bitcoin Slows Down

Observations from CME futures indicate an increasing stream of assets flowing into Ethereum$2,315 -2.42%'s native token, ether (ETH), at a faster pace than its counterpart, bitcoin (BTC). Deribit listed options suggest a growing preference for ether call options in the market. These key metrics hint at a potential shift of investor interest from bitcoin, the recent standout in the market, towards ether in the upcoming weeks.

Comparing Performance: Bitcoin vs Ether

Bitcoin$42,260 -0.64% has experienced a staggering rally this quarter, boasting a 60% increase. In comparison, ether, often regarded as a deflation deflationary currency with the allure of bonds and compliance with ESG, has trailed behind with a 35% gain according to source data. The discrepancy in performance is even more pronounced when viewed over a broader timescale, with bitcoin recording a 163% increase relative to ether's 89%.

Money Flowing Into Ether Futures

This divergence could narrow as assets are reportedly flowing into ether futures at a more rapid pace than bitcoin. The notional open interest of the Chicago Mercantile Exchange's cash-settled ether futures contract recorded a 30% increase in the last five days, reaching $711 million. This outpaces bitcoin's 19% growth to $4.9 billion, as per Velo Data. The standard futures contract for ether on the CME is sized at 50 ETH, compared to bitcoin's 5 BTC.

Ether and Bitcoin CME Futures Pricing

Rising positive spreads between ether and bitcoin CME futures pricing hint at the same potential shift. Reflexivity Research reported that the premium in ether futures in comparison to the spot index price was 5% higher than bitcoin earlier this week. Reflexivity Research suggests monitoring the market closely for early signs of a potential ETH Exchange Traded Fund (ETF), as traditional finance (tradfi) may start to rotate into the ETH ETF trade after two months.

Shift in Options Market

In the options market listed on Deribit, traders are seen to lean more towards ether calls and bitcoin puts. The one-month ether call-put skew, a measure of the spread between implied volatility premium or demand for call and put options expiring in four weeks, has doubled to over 4% this month. It signifies a strengthening call bias. Conversely, BTC's one-month skew has declined from 5% to 2%. This suggests that traders are beginning to prefer puts over calls.

In conclusion, these market trends may suggest that bitcoin might slow down, providing ether the opportunity to close the performance gap in the coming weeks.

Edited by Jonathan Stoker