Ether Emerges as Traders' Preferred Option Amid Spike in Price Volatility

Key Insights

Ether’s implied volatility has risen sharply against Bitcoin, indicating expectations of larger price movements ahead.
Interest in Ether is burgeoning, with Ethereum ETFs attracting $812 million in just two weeks.
Traders are currently favoring Ether over Bitcoin, as evidenced by the higher premiums of ETH call options.

Current Market Overview

Ether (ETH), trading at $2,760.24, is gaining ground against Bitcoin (BTC), priced at $109,412.64. According to TradingView, the volatility spread between Volmex’s 30-day ether implied volatility index (EVIV) and Bitcoin’s index (BVIV) has soared to 34%, marking the highest since November 2022, when the FTX exchange collapsed, costing investors billions.

This widening spread suggests significant expectations for volatility in the Ether market, potentially impacting the wider cryptocurrency space in the upcoming weeks.

Recently, Ether demonstrated remarkable price increases, with an 8% rise to $2,728, outperforming Bitcoin’s 1% gain, according to CoinDesk data.

In an email, Alex Kuptsikevich, Chief Market Analyst at The FxPro, commented, “Ethereum is ramping up with new investments. Over the past fortnight, Ethereum ETFs have attracted $812 million, the largest inflow this year.”

Additionally, Ether’s inflow into spot ETFs has accelerated, while Bitcoin ETFs have garnered less than $400 million within the same period.

According to QCP, a trading firm based in Singapore, various factors are aligning in favor of Ether’s bullish outlook. They noted, “Macro tailwinds are developing for ETH, especially as the GENIUS Act progresses in the U.S. Senate, and the discussions around Circle’s IPO gain traction.”

Traders’ preference for Ether is highlighted by the fact that on Deribit, ETH call options are trading at a 2% to 3% premium compared to puts expiring in March 2027, whereas BTC calls trade at a 0.5%-1.5% premium.

In essence, traders are showing a stronger willingness to pay for upside exposure in Ether compared to Bitcoin. Block Scholes, an analytics firm, reports that the 30-day call skew for ETH has hit 6.24% with funding rates climbing to 0.009%, indicating a robust demand in Ether options markets.