Traders Shift Focus from Bitcoin: Time for Ethereum to Shine?
Ethereum’s futures are trading at a 5% higher premium than Bitcoin’s.
The potential approval of a spot Ethereum ETF in mid-2024 is expected to further boost Ethereum’s price.
Bitcoin has been the coin on the tip of everyone’s tongue of late – and for good reason. The legacy cryptocurrency has climbed to its highest point in 20 months, bursting past the USD $40K ($61K AUD) barrier. However, several metrics sourced from derivatives markets suggest that the tide may be turning as investors turn their attention back to Bitcoin’s second-in-command – Ethereum (ETH).
Massive Performance Gap Might be Starting to Close
Ethereum has hardly endured a bad year. The popular DeFi token is still up over 75% in the past 12 months, with much of those gains coming in the past quarter. However, when compared to the other blue-chip crypto asset, Bitcoin, it looks less impressive.
Yet, data from several derivatives exchanges suggest that to close out 2023 the gap might be starting to narrow. According to Chicago Mercantile Exchange (CME), one of the world’s leading futures exchanges, in-flow for Ether derivatives contracts has ballooned by 30% to hit USD $711 million (AUD $1.085 billion). By comparison, Bitcoin’s growth has “only” been 19% in the same metric – although there is naturally much more investor money tied up in BTC futures contracts, amounting to USD $4.8 billion (AUD $7.48 billion).
This suggests that high-net-worth investors are demonstrating renewed interest in Ethereum and that the spotlight may be starting to steadily shift away from Bitcoin.
According to a representative from Reflexivity Research:
The futures basis [difference between the spot and futures price of an asset] for Ethereum on CME is now trading at a 5% premium to that of Bitcoin… we can see that open interest for ETH on the CME has now started to rise.
The positive outlook comes as an Ethereum spot ETF seems inevitable to follow on from Bitcoin’s pending approval in the coming months. Some investors believe that the hype around BTC’s potential index fund will eventually funnel through to Ether in mid-2024.
An Ethereum #ETF could be around the corner, bringing in major institutional interest.
Here’s how liquid staking mechanics could play a leading role in crypto’s next chapter pic.twitter.com/tw5HuVFliZ
— Origin Protocol (@OriginProtocol) December 6, 2023
The post Traders Shift Focus from Bitcoin: Time for Ethereum to Shine? appeared first on Crypto News Australia.
Filed under: Bitcoin - @ December 7, 2023 6:05 am