Record $10B Ethereum futures volume for a fleeting moment outpaces Bitcoin’s

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The amount on Ethereum futures surpassed that of Bitcoin after reaching a new high of $10 billion, and derivatives evidence indicates that the price of Ether may rise higher.

In the last 30 days, the price of Ether (ETH) has decoupled from the price of Bitcoin (BTC), resulting in a 67.5 percent gain, whereas the leading cryptocurrency price has barely shifted. Ether’s all-time high of $3,605 on May 5 boosted the asset’s futures open interest to $10 billion.

This campaign raises some critical concerns, as the domination of Bitcoin’s derivatives markets seems to be under threat right now. For the first time in history, Ether’s combined futures volumes exceeded Bitcoin’s on May 4.

Ether and Bitcoin aggregate futures volume, USD. Source: Coinalyze

According to Coinalyze volume results, $2.6 billion in CME Bitcoin futures traded on May 4, along with $1.1 billion in CME Ether futures. However, Ether’s combined amounts outpaced Bitcoin’s by $87 billion to $81 billion.

Some may argue that volumes aren’t as essential as open interest, which is a valid point. The overall number of contracts in play, regardless of whether they were traded on a given date, is represented by open interest. In that regard, Bitcoin already has double the available demand in futures contracts as Ether ($10 billion).

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Ether futures aggregate open interest, USD. Source: Bybt

The above chart shows Ether futures mind-blowing 117% increase in two months. It is also worth noticing CME’s contracts reaching a $460 million open interest, a seven-fold increase since March.

Ether’s soaring futures volume signals increasing interest from traders

To determine if the market is bullish, one should examine its premium. The premium is a measure of the price difference between futures contract rates and normal spot market prices. This measure is widely referred to as the foundation, and it may mean a 10% to 20% annualised premium.

The key cause of this disparity is the stablecoin lending cost, as futures participants are delaying settlement by using derivatives contracts.

OKEx 3-months ETH futures basis. Source: Skew

According to the chart above, Ether’s futures premium peaked at 45 percent in mid-April and has since stabilised near 25 percent. This data is very positive because it indicates that despite the Ether price hitting back-to-back all-time highs, there is not a lot of hope.

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If some observers may see this evidence as a “glass half full,” others may see it as a lack of confidence on the part of experienced traders. Regardless of one’s point of view, it is important to consider the effect of the carry exchange, which has a negative impact on the basis measure.

Investors seeking a fixed-income exchange will sell Ether futures contracts when purchasing spot Ether.

Regardless of how the data were interpreted, there appears to be healthy development in Ether’s futures markets.

The inevitable ‘flippening’ of Bitcoin open interest seems to be a long way off. In any case, the nett rise in cryptocurrency derivatives benefits the business.


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