Ethereum overtakes Bitcoin in the options market for the first time in history

The native token of the Ethereum blockchain (ETH) overtook the Bitcoin leader (BTC) in the options market for the first time in history.

As of Monday morning, the cumulative dollar value of ETH options contracts opened on the Deribit exchange was $5.7 billion, 32% higher than the $4.3 billion for BTC. Deribit is the largest stock options broker cryptocurrencies worldwide, accounting for more than 90% of the total global volume.

The financial volume of open options refers to the number of option contracts (call, call and put, put) traded multiplied by the spot market price of the underlying asset.

ETH’s first all-time advance over BTC in the options market comes at a time when traders are accumulating ETH calls and betting on rising price. crypto asset in the hope that the “Merge”, a major update of the project, will lead to a 90% reduction in the emission of the tokens natives of the network and provide them with a store of value.

The upgrade, which will likely take place in September, will combine the current block chain proof of work (PoW) of the Ethereum with a parallel proof-of-stake (PoS) blockchain of the project, called “Beacon Chain”, which has been running since 2020.

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The increase in demand for call options is evident from analysis of the put-to-call ratio, a metric that analyzes the number of open sell positions relative to buy positions.

When there are more call options open, it means the market is bullish. Remember that call options provide insurance against upside moves, while put options provide protection against price declines.

“While some may be uncertain about the outcome of the merger, at Deribit we see many post-merger options being created. bullish momentum,” Deribit Chief Commercial Officer Luuk Strijers told CoinDesk.

Activity in the ETH spot market also increased. The asset exceeded the Bitcoin and became the most traded in the cryptocurrency exchange Coinbase. While ETH trading volume represented 33.4% of the total volume recorded for the week ending July 29, BTC trading volume represented 32%. Solana (FLOOR) placed third.

“Investors have looked to buy BTC as the crypto has kept pace with ETH. Additionally, we have seen renewed interest in SOL, Polygon (MATIC) and Avalanche ( AVAX),” Coinbase quoted in its weekly cryptocurrency commentary published on Friday (29).

Despite the optimism with Ethereum, it should be remembered that the crypto asset, which has a market value of US$200 billion, is only half the size of Bitcoin, which has a capitalization of US$446 billion. , according to data from aggregator CoinMarketCap this Friday. Some observers are confident that the digital asset will soon replace BTC as the world’s largest cryptocurrency by market capitalization.

On the other hand, ETH continues to lag behind Bitcoin in terms of daily trading volume in the futures markets. According to data provided by Skew, the financial volume of ETH futures is around $6 billion at the time of writing, which is half of the $12 billion of Bitcoin futures.

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