ETH to BTC futures volume ratio has approached 100%

What’s new? The volume ratio of Ethereum futures to bitcoin futures has almost reached parity, rising to a level of 98%. This indicates a dramatic shift in the pessimistic sentiment that has dominated investor sentiment toward the largest altcoin for much of the past year.

Material by The Block

What else is known? The rise in the ratio indicates a change in investor preferences and renewed confidence in Ethereum’s prospects. It has recovered after hitting a low of 42% in October 2024.

The decline in October 2024 coincided with a rise in popular discussions in the community that Ethereum was no longer able to hold investor interest and maintain its position as the premier smart contract platform.

Concerns have been fueled by high transaction fees on the underlying Ethereum blockchain, increased competition from other Layer 1 (L1) networks with higher throughput, and the relatively low popularity of ETH-based spot exchange-traded funds (ETFs) in the United States compared to similar bitcoin products.

The current recovery reflects renewed optimism about the Ethereum ecosystem, driven by the growing popularity of Ethereum-based Layer 2 (L2) networks. These networks offer much lower fees and high transaction speeds compared to the underlying blockchain, as well as increased on-chain activity in DeFi protocols.

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The upcoming launch of crypto ETFs based on Solana and XRP introduces a new competitive dynamic to the derivatives market.

These tokens may attract some speculative trading volume, but Ethereum’s established infrastructure and developer ecosystem may give ETH an advantage in maintaining market share in institutional adoption.

Currently, nine spot ETH funds based on the Ethereum native token are trading on the US stock exchanges, Nasdaq, NYSE, and CBOE.

The products were admitted to the market by the securities regulator SEC on July 23, 2024, and have since raised $4,21 billion and accumulated $10,32 billion or 3,42% of the asset’s market capitalization under management.

Leading the segment are the ETHA fund from BlackRock, the world’s largest investment firm, with $5,52 billion in inflows and $4,43 billion in assets, and Fidelity’s FETH with $1,67 billion in inflows and $1,25 billion in assets.

During Friday’s late June expiration, leading crypto derivatives exchange Deribit settled 939 000 Ethereum contracts, equivalent to a record $2,29 billion in face value. The put/call ratio was 0,52 and the maximum pain point was $2200.