Ethereum futures and options have grown quite a bit, in terms of popularity at least. Along those lines, open interest in Ether options trading has risen from $ 50 million to $ 4 billion in the last year. All of this could be an indication of significant institutional involvement in the ETH valuation. In other words, it seems to be the consequence of a renewed institutional demand.
Institutional demand for Ether grows, and with it the open interest in options
According to data from Two Prime Digital Assets, the open interest for Ether options has been 80x. And they also specified that this goes beyond mere retail speculation. As part of its report, the company explained that: “Institutional money managers have moved to begin hedging net long portfolios against exaggerated volatility events.”
Amid growing institutional demand for ETH, Two Prime also predicted that Ether will significantly delink from Bitcoin’s price action. The Two Prime report also argued that the participation of users with large amounts of money will cause a constant decrease in realized volatility.
How has the Ether futures market been?
The ETH futures market has grown in much the same way. Data from Bybt showed that open interest in ETH futures increased 20 times over the same period. Thanks to this, it currently stands at more than US $ 7.68 billion.
Also, according to a CoinShares report called “Digital Asset Fund Flows Weekly“, ETH posted investment product revenue of $ 34 million over the past week. This figure puts the total ETH inflow for crypto fund managers at $ 792 million. This is about 8% of the total assets under management for these funds, according to the report.
To put it in context, and understand the importance, it should be noted that this investment inflow of US $ 34 million in ETH occurred in parallel to the lowest weekly inflow figures for Bitcoin since October 2020. In fact, the movements of funds were primarily BTC outflows, with $ 21 million (the largest weekly outflow on record) moving in the opposite direction.