Crypto News

Ethereum Options Market Soaring to Bitcoin’s 2018 Levels Hints at Bull Market

  • The size of the Ethereum options market on Friday equaled the size of the Bitcoin options market in December 2018, according to data provided by Skew.
  • Ethereum’s growth in the derivatives market pointed to its increasing institutionalization like Bitcoin.
  • It further hinted at a breakout price rally ahead for the second-largest cryptocurrency.

Ethereum is tailing Bitcoin in terms of institutional adoption.

The second-largest cryptocurrency by market capitalization achieved new mettle in its derivatives market. According to data fetched by Skew, the size of the Ethereum options market on Friday touched levels that Bitcoin reached back in December 2018.

ethereum, ethusd, ethusdt, btcusd, btcusdt, cryptocurrency, crypto

Ethereum open interest across multiple derivatives exchanged touched Bitcoin's 2018 levels. Source: Skew

The Skew chart showed the total number of outstanding options contracts nearing $150 million-mark, its highest since its launch. Meanwhile, the current open interest in Bitcoin options was about six times larger than that of Etheruem – at around $1 billion.

Capital Injection Grows

In retrospect, outstanding contracts represent unsettled deals in the derivatives market. They equal the total number of purchased and sold cryptocurrency options. An increasing number of open interest means more money is coming into the options market – and vice versa.

Nevertheless, the capital that enters the market could be for both bearish and bullish contracts. Therefore, the only way to gauge investors’ sentiment is to measure the total number of “put” options (bearish) against “call” options (bullish).

If the so-called Put/Call ratio is above 1, then it means a majority of investors expect the options contracts to fall. Nevertheless, the rate is prone to fluctuating as the new contracts with polar-opposite bias get opened or closed regularly.

ethereum, ethusd, ethusdt, btcusd, btcusdt, cryptocurrency, crypto

Ethereum Put/Call ratio recorded until Monday. Source: Skew

That said, an increasing open interest does not confirm a spot price trend. But it represents a growing interest of prominent traders and institutional investors in the underlying asset. Therefore, Ethereum is visibly winning in terms of its options market growth.

Taking Cues from Bitcoin

Part of the reason why Ethereum is looking at a rising institutional interest is its involvement in a string of growth-based projects. The cryptocurrency’s underlying blockchain network supports the world’s leading stablecoins (USDT, USDX, PAX, etc.) and decentralized finance projects (Maker, Sythentix, dYdX, Compound).

While not the same, but a similar set of fundamentals helped grow Bitcoin in the conscience of larger institutions. The cryptocurrency crashed to near $3,100 in December 2018 but rose back at the heights of the U.S.-China trade war, yuan devaluation, and Facebook’s foray into the digital currency space with Libra.

That partially helped institutional traders to start exposing their portfolios to the Bitcoin derivatives market, including both options and futures. Just recently, billionaire hedge fund manager Paul Tudor Jones invested an undisclosed sum into bitcoin futures.

ethereum, ethusd, ethusdt, btcusd, btcusdt, cryptocurrency, crypto

Ethereum price chart showings it recovering from March 2020 crash. Source:

Ethereum is looking at similar opportunities due to its technological growth. The cryptocurrency could witness its derivatives market swell in size as more and more institutions look for higher-yield alternatives. As a result, its open interest may keep rising while helping its spot sentiment grew bullish as well.

How useful was this post?

Click on a star to rate it!

As you found this post useful...

Follow us on social media!

Write a Comment

Related Crypto News

Tiktok Ban: US May Join India in Banning Chinese Social Media Apps
The Trump administration is looking at banning Tiktok and other Chinese social media apps, according to Secretary of State... Wallet Launches New Portfolio Breakdown and Stablecoin Swap Features
With over 11 Million Wallets created, we’re building new features our users need most in order to enjoy...
Economist Warns of 1929-Like Second Leg Down; Will Bitcoin Follow?
Bitcoin has been tightly correlated with the stock market since the start of 2020. If a warning from a...
The Three Most Controversial Bitcoin Price Models and What They Predict
Many are highly critical of the three highly popular models used widely by Bitcoin analysts — stock-to-flow, Hyperwaves, and...
Binance Donates $70k of PPE Equipment to Hospitals in the Philippines
Binance Charity (BC) has donated $70k worth of personal protective equipment (PPE) to eighteen hospitals and government institutions in...
Binance Donates $70k of PPE Equipment to Hospitals in the Philippines
Binance Charity (BC) has donated $70k worth of personal protective equipment (PPE) to eighteen hospitals and government institutions in...

Featured Crypto News

Bloomberg Analyst: Key Metrics Show Bitcoin Should Rocket Towards $12,000
It’s been a slow past few weeks for the Bitcoin market. The cryptocurrency has effectively been range-bound for two...
Report: $300B Worth of Food Will Be Traced Using Blockchain and IoT by 2027
A report claims that the global food industry could save over $100 billion annually by implementing blockchain and IoT...
BItcoin’s Sudden Drop to $9k Coincides With Fed’s Balance Sheet Contraction
Bitcoin plunged back towards $9,000 despite showing signs of upside correction in the early Friday session. The latest price...
Cardano (ADA) Is Forming the Signal That Preceded a 75% Crash: Analyst
Despite Bitcoin’s stagnation, Cardano (ADA) has performed extremely well over recent weeks. Data from crypto research firm Messari shows...
Three Important Reasons Why Ethereum Could Tumble Below $220
Ethereum failed to continue higher above $233 and declined sharply against the US Dollar. ETH is now trading below...
Bitcoin Dropping to $6K ‘Golden Pocket’ Isn’t Bearish, Says Trader
A classic Fibonacci retracement could land BTC/USD at $6,300 or lower and still not disturb the long-term trend. Bitcoin...