ETH set to eclipse BTC after spot ETF launch

• Market trends favor Ethereum as ETF launch approaches.
• The report showed a changing landscape in the volume of spot, options, futures and perpetual contracts trading.

Cryptocurrency markets have seen significant volatility over the past two months. Market preferences are shifting, especially since the SEC approved Ethereum (ETH) spot ETFs in May.

With the expected launch of ETH spot ETFs, investors are becoming increasingly optimistic.

Although ETH ETFs have yet to begin trading, a report from Kaiko and a joint report from Block Scholes and Bybit have shown a shift in market preferences.

A change of trend

According to the recently released report by Block Scholes and Bybit, there has been a massive shift in the trading volumes landscape of spot, futures, options and perpetual contracts.

The report argued that Ethereum was enjoying a better volatility premium than Bitcoin (BTC). This was mainly due to an increase in address activity and a positive market sentiment shift in favor of ETH.

Source: Blockscholes & Bybit

Ethereum Gains Ground on Bitcoin

The ETH/BTC ratio has maintained a positive value of 0.05 since the approval of spot ETFs. This ratio is significantly higher than pre-approval levels of around 0.045.

The higher ratio shows that when ETH spot ETFs start trading, they will continue to outperform BTC.

Source: Kaiko

General market sentiment

ETH has gained more than BTC in several areas since the approval of ETH spot ETFs in May.

Although the cryptocurrency market has seen high volatility over the past two months, ETH futures have shown more resilience and faster recovery than Bitcoin open interest.

ETH’s faster recovery for its future suggests growing positive sentiment, with many investors confident in its future.

Source: Blockscholes & Bybit

ETH trading volume has remained in the same range since May. According to Kaiko, ETH liquidity has been maintained with a depth of 1% and a constant range of $250 million.

The ETF approval seems to have changed the trend after falling below $200 million and reversed the trend after the SEC approval. Therefore, the anticipation of the ETF has played a vital role in improving liquidity.

Source: Kaiko

Additionally, ETH perpetual contracts saw an increase in trading volume. This increase showed that investors were willing to pay a premium to hold long positions, which is a testament to confidence in the future potential of cryptocurrencies.

As Kaiko reports, implied volatility has been increasing over the past seven days. For example, ETH options expiring this Friday have increased from 53% on July 13 to 62% at press time.

Read Ethereum (ETH) Price Prediction 2024-25

The sharp rise in these contracts implies that investors were paying for short positions to protect themselves against short-term price increases.

This market sentiment shows considerable optimism about the future of ETH, especially with the upcoming ETFs this week.

Source: Kaiko