Ethereum Gaining Ground on Bitcoin in Growth Momentum
Date: 2023-12-06 Author: Dima Zakharov Categories: BLOCKCHAIN
Key market metrics for cryptocurrency derivatives indicate a growing interest in Ethereum (ETH) compared to Bitcoin (BTC). Over the past year, ETH has seen an 89% increase in value, while Bitcoin has surged by 163%. However, recent data from Velo Data, an analytics service, shows that Ethereum's futures' open interest on the Chicago Mercantile Exchange (CME) has risen by 30% in the last five days, reaching $711 million, surpassing Bitcoin's 19%.
In traditional trading, open interest refers to the total number of buy orders existing at the opening of the market. In futures and options trading, open interest represents the total number of outstanding contracts at a specific point in time. This includes futures contracts that have not been executed, expired, or settled by delivering the underlying assets.
Open interest serves as a metric for assessing market participants' involvement in a particular futures contract. A significant increase in open interest, combined with a rising asset price, can indicate an active uptrend.
"Perhaps it's too early to say, but it seems that market participants are already speculating on news about the approval of an Ethereum ETF," according to Reflexivity Research.
In mid-November, BlackRock, the world's largest investment firm, filed an application with the Delaware State regulator and the U.S. Securities and Exchange Commission (SEC) to launch a spot ETF for Ethereum (ETH).
Currently, only futures-based ETFs for Ethereum exist in the market. A spot ETF provides investors with direct access to the underlying asset, while investing in a futures-based ETF is essentially a bet on the asset's future price without influencing the market.
On November 10, 2023, CME overtook Binance in terms of open interest volume for Bitcoin futures and claimed the top position among all trading platforms in this regard. On December 1st, the open interest in Bitcoin futures trading on CME reached a record-breaking $4.17 billion, setting a new industry high.
