Bitcoin [BTC]The still-dominant rise in the spot market (market capitalization) left all rivals behind by a margin. Ethereum [ETH]the nearest rival still has miles and miles to go before they can catch up to the centerpiece.
However, what if we shifted the battlefield to the futures (market) instead? Here’s how the tables have turned this year comparing BTC and ETH.
All in the name of Merge
The upcoming Ethereum merger has created positive hype around the network and the future it holds. The highly anticipated merger would result in a reduction in ETH issuance and bring a store of value to the asset.
Futures markets have hit a market capitalization of $1 trillion on the hype according to a new report from Tom Rogers, head of research at ETC Group. In doing so, Ethereum Futures overtook Bitcoin in terms of trading volume.
In fact, last month (August) was the “first time since records began that Ethereum futures trading volume exceeded Bitcoin, at $1.07T for the month,” the report added.
Plus, the latest from Glassnode turn on the light on the same development. Here, the analysis showed the outright difference on a 3-month annualized rolling basis between the two rivals.
(The three-month futures annualized rolling basis is the annualized return (percentage return) obtained by simultaneously buying a cash asset and simultaneously selling a futures contract on it that expires in three months. Due to the factors supply and demand, futures contracts often trade at a higher price than their spot counterpart.
This is used by traders to lock in profits which is the difference between spot and futures prices, which is currently going perfectly for the larger altcoin.
ETH surpassed BTC trading volume in the futures market and the the attractiveness of spot hedging via short forward contracts has led ETH in retrograde. This means that it exhibited upside potential as traders bet bullish on the same. (Forwarding occurs when futures prices are lower than the expected spot price and therefore rise to reach that higher spot price.)
Open interest – or the number of unsettled futures contracts – jumped to more than $9 billion this week, from less than $4 billion in July, the data showed. Additionally, ETH was dominated by bullish call option traders, with the Put/Call (PCR) ratio standing at 0.25.
In fact, at press time, the rate stood at 0.24, which is again a bullish sign.
Looking at BTC, the token remained in “contango” and fundamentals suggested the “bottom is in” according to Glassnode’s review. As the Ethereum mob celebration has begun, Bitcoin supporters are wary of BTC.
Bitcoin futures volume fell back to $941 billion in August 2022, behind its nearest competitor, Ethereum Futures.
Indeed, a stark contrast to the past two or three years since Bitcoin has always been the one ahead of Ethereum.