Ether More Favored by Traders as Volatility Against Bitcoin Hits Highest Since FTX Crash
Ethereum (ETH) is experiencing a surge in popularity, surpassing Bitcoin (BTC) in recent price gains and attracting significant institutional investment. This shift is evidenced by the widening gap between Ethereum’s and Bitcoin’s implied volatility indices, reaching its highest point since the FTX collapse in November 2022. This indicates a market expectation of greater price fluctuations for ETH compared to BTC in the near future.
Over the past 24 hours, ETH has seen an impressive 8% increase, reaching $2,728, significantly outperforming BTC’s 1% gain. This rise is fueled by substantial inflows into Ethereum ETFs, totaling $812 million in the last two weeks – the highest figure this year. In contrast, BTC ETFs have attracted less than $400 million during the same period.
Several factors contribute to this bullish sentiment surrounding ETH. The progress of the GENIUS Act in the US Senate, renewed discussions regarding Circle’s IPO, and increasing regulatory clarity for stablecoins all point towards a positive outlook for Ethereum’s role in tokenization and settlement. This is further supported by QCP, a Singapore-based trading firm, which highlights these macro tailwinds as favorable for ETH.
The options market also reflects this preference for ETH. On Deribit, ETH call options are trading at a premium of 2-3% relative to put options, extending to March 2027. This contrasts with BTC call options, which show a much smaller premium (0.5-1.5%). This suggests traders are willing to pay more for the potential upside of ETH compared to BTC.
Further bolstering this trend, analytics from Block Scholes indicate a surge in ETH options market activity. The 30-day call skew has reached 6.24%, and funding rates have spiked to 0.009%, with the volatility term structure inverting again. All these indicators collectively point towards a significant shift in market sentiment, favoring Ethereum over Bitcoin in the current climate.
