The interest in Ether options can slowly surpass bitcoin which means it could drive ETH to new highs as we are reading in the following ethereum news today.
Ether options are having a great year with the open interest on Deribit which is the largest market for these options surged 315% to $158 million in the past two months, breaking the $150 million level for the first time in a long time. Even though Ether first came to serve to users of the ethereum platform as a wallet with apps developed on the platform, it has emerged as the clear Bitcoin competitor and the second-biggest cryptocurrency by market cap.
The interest in Ether options emerged the most in 2019 when Deribit launched the ETH derivatives option on its exchange including futures, perpetual, and options. A year later, after Bitcoin’s halving and crypto’s general 2020 rally, the options were the prime development to emerge from the entire crypto industry. To capitalize on this opportunity, another exchange ErisX launched in the second quarter the first US-based Ether futures contracts which will be regulated by the Commodity Futures Trading Commission. OKEx has launched Ether options to get into the mix and gained a lot of traction since the launch in June.
As seen by analytics firm Skew, investors anticipated a bigger growth on the market when pegged to Bitcoin. Looking at the ETH/BTC pair spread for the six-month period, the volatility increased to a six-month high of 22%. Implied volatility is the standard deviation on the returns traders that are forecasting and represents the expectation of how risky an asset will be in the future. The increase implied that investors were expecting a higher percentage shifts in the ETH price. The phenomenon of Ether options picking up traction in the second quarter is not quite unique for the altcoin as it goes hand in hand with BTC options in general. The BTC futures hit their 2020 low on June 12 as the chief commercial officer of Deribit Luuk Strijers said:
“We see increased interest in ETH options due to price performance since mid-March, new firms entering the options space and intensified sales efforts by our partners. Open interest is at an all time high at around USD 157m or ~660k contracts out of which 279k or 42% will expire 26 June 2020.”
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