Investors are more optimistic about Ethereum than Bitcoin

A recent report reveals a significant fork in investor sentiment between ethereum (eth) and bitcoin (btc).

Bybit, the world's second-largest cryptocurrency exchange by trading volume, published its latest crypto derivatives analysis report in collaboration with BlockScholes.

According to the report, market trends and trading signals across spot, futures, options, and perpetual contract trading volumes show growing bullish sentiment toward eth.

Investors are bullish on eth due to the imminent launch of the first Ether Spot ETFs in the United States. This optimism is reflected in eth’s sustained volatility premium over btc, even amid the recent market activity and sell-off.

Results of the study

Despite the recent market crash, eth futures have recovered in open interest faster than btc futures. This indicates a strong market narrative around eth and its prospects. Furthermore, higher trading volumes in eth perpetual contracts suggest substantial long positions driven by strategic positioning ahead of market events.

During the recent cryptocurrency sell-off, there was a surge in perpetual swap trading volume, with many traders closing their long positions.

“The increased trading volume in eth suggests that traders were trapped in long positions to a greater extent, possibly due to positioning ahead of an ETF’s expected trading start date,” the report reads.

Additionally, eth options market volatility remains high, particularly in anticipation of the ETF approval, in contrast to the more defensive stance of btc options.

According to the report, eth options have a volatility premium of between 10 and 15 points compared to btc at all points in the term structure. Moreover, eth has regained its volatility bias towards out-of-the-money (OTM) call options much faster than btc.

There has also been significant trading volume in eth call options, far outpacing activity in its put options.

Eugene Cheung, Head of Institutions at Bybit, commented: “The latest data underscores eth’s resilience and market appeal as we approach key regulatory milestones. Investors are demonstrably positioning themselves favorably amid rising market expectations.”