Ether flips bitcoin in options market for the first time

Ether (ETH), the native token of Ethereum’s blockchain, has overtaken bitcoin (BTC), the industry leader in the options market, for the first time on record.

At the time of writing, the cumulative dollar value of open ether options contracts on the major exchange Deribit was $5.7 billion, or 32% higher than the $4.3 billion closed in open bitcoin options trades. Deribit is the world’s largest crypto options exchange, accounting for over 90% of global total trading volume and open interest.

Open options trades or open interest refers to the number of options contracts (calls and puts) but not squared off with an offset position. Notional open interest is calculated by multiplying the number of open contracts with the spot market price of the underlying asset.

Ether’s historic first gain over bitcoin in the options market comes when traders place ETH calls or bullish bets in the hope that an imminent merger with Ethereum will reduce ETH issuance by 90% and serve as a store of value appeal for the cryptocurrency. will bring. The merge, likely in September, will combine Ethereum’s current proof-of-work blockchain with a proof-of-stake blockchain called Beacon Chain, which has been in operation since 2020.

Increased demand for calls is evidenced by the sliding put-call open interest ratio, a measure of the number of open put positions relative to open call positions. Call options offer insurance against bullish moves, while put options offer protection against price drops.

Luke Strijders, Chief Commercial Officer of Deribit, said, “While some may be uncertain about the outcome of the merge, at Deribit, we see a lot of options open interest building up following the merge. Overall put calls The ratio is at year’s low, indicating a bullish momentum.” CoinDesk.

Read |  Apcoin DAO Launches 24-Hour Bored App News Website, Here's Why

“BTC put/call ratio is at 0.5 while ETH put/call ratio is halved at 0.26 and year-end is down 50% again at 0.12. Largest ETH open interest made at $3,000 strike in December expiry call option Is. .” Streamers added.

The ether put-call open interest ratio has slipped to a one-year low, indicating a rally in the market.  (Levitas, Deribit)

The ether put-call open interest ratio has slipped to a one-year low, indicating a rally in the market. (Levitas, Deribit)

Activity in the ether spot market has also increased, with the cryptocurrency recently overtaking bitcoin as the most traded coin on the Nasdaq-listed crypto exchange Coinbase (COIN). While ether trading volume accounted for 33.4% of the total trades registered for the week ending July 29, bitcoin trading volume accounted for 32%, with SOL in third place.

Pie chart showing the trading volume of various coins on Coinbase for the week ending July 29.  (coinbase)

Pie chart showing the trading volume of various coins on Coinbase for the week ending July 29. (coinbase)

“Investors are looking to buy BTC as it does not keep pace with ETH and broader premises. Additionally, we have seen renewed interest in SOL, Matic, and Avax,” Coinbase’s weekly market commentary published Friday read.

That said, in terms of market valuation, Ether, at $199 billion, is still half the size of Bitcoin, which had a market cap of $443 billion at press time. Some observers believe that Ether will soon replace Bitcoin as the world’s largest cryptocurrency by market cap.

Furthermore, Ether continues to play a second role to Bitcoin in terms of daily trading volume in the futures and options markets and open interest in the futures market. According to data provided by Skew, the hypothetical open interest in Ether futures was approximately $6 billion as of writing. This is half of the $12 billion in bitcoin futures.

Read |  Here's Why It's Really Not Crazy To Buy Coinbase Stock Right Now

Source link