Investors more bullish on Ethereum than Bitcoin

A recent report has revealed a significant divergence in investor sentiment between Ethereum (ETH) and Bitcoin (BTC).

Bybit, the world’s second largest cryptocurrency exchange by trading volume, has released its latest Crypto Derivatives Analytics Report in collaboration with BlockScholes.

According to the report in question, market trends and trading signals across spot trading volume, futures, options, and perpetual contracts indicate a growing bullish trend towards ETH.

Investors are bullish on ETH due to the recent launch of the first Ether Spot ETFs in the US. This optimism is reflected in ETH’s continued volatility premium over BTC despite recent market activity and sell-offs.

Study findings

Despite the recent market decline, ETH futures have recovered faster than BTC in open interest. This points to a solid market narrative around ETH and its prospects. Furthermore, higher trading volumes in ETH perpetual contracts suggest significant long positions driven by strategic positioning ahead of market developments.

During the recent sell-off in cryptocurrencies, trading volumes in continuous swaps increased, and many investors closed their long positions.

“The larger volume activity in ETH suggests that investors are being caught up in larger-sized long positions, likely due to taking positions ahead of an expected ETF trading start date,” the report said.

Additionally, ETH options market volatility remains high, especially in anticipation of ETF approval, contrasting with the more defensive stance of BTC options.

According to the report, ETH options carry a 10-15 percentage point premium in volatility over BTC across all tenor points in the term structure. Additionally, ETH has regained its volatility smile trend toward out-of-the-money (OTM) calls much faster than BTC.

There was also a significant trading volume in ETH calls, far outpacing the activity in puts.

“The latest data highlights ETH’s resilience and market appeal as it approaches key regulatory milestones. Investors are clearly positioning themselves positively amid growing market expectations,” commented Eugene Cheung, Head of Institutions at Bybit.