Ethereum futures and options have grown quite a bit, in terms of popularity at least. In that regard, open interest in Ether options trading has increased from US$ 50 million to US$ 4 billion in the last year. All of this could be indicative of significant institutional involvement in the valuation of ETH. In other words, it seems to be the result of renewed institutional demand.
Institutional demand for Ether is growing, and with it the open interest of options
According to data from Two Prime Digital Assets, the open interest of 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 start hedging long net portfolios against exaggerated volatility events.”
Amid rising institutional demand for ETH, Two Prime also predicted that Ether will significantly disengage from Bitcoin price action. The Two Prime report also argued that the participation of users with large amounts of money will cause a constant decrease in the volatility realized.
How has the Ether futures market been?
The ETH futures market has grown very similarly. Bybt data showed that open interest in ETH futures showed a 20-fold increase in the same period. As a result, it stands at more than US$ 7.68 billion today.
Also, according to a CoinShares report called “Digital Asset Fund Flows Weekly“, ETH recorded investment product revenue of US $ 34 million over the past week. This figure puts the total ETH entry for cryptocurrency fund managers at US $ 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$ 34 million investment inflow in ETH came in parallel with Bitcoin’s lowest weekly inflow figures since October 2020. In fact, fund movements were mainly BTC outflows, with US $ 21 million (the largest weekly outflow on record) moving in the opposite direction.