Ethereum Options Trading Gaining Huge Interest From Institutional Investors.
2021-04-27 | Robin Williams
The massive growth of Ethereum’ futures & options arena is reportedly revealing a significant institutional involvement
within the second-leading cryptocurrency by
top market cap.
In line with an official
report by crypto investment advisory firm Two Prime Digital Assets, the 80x-times growth in Ethereum [ETH] options open interest goes beyond mere retail speculation. As
a part of its report, the firm argued: “Institutional money managers have moved in
to start out hedging net long portfolios against outsized volatility events.”
The same exponential growth
can also be seen
within the ETH
futures exchange. Indeed,
data from cryptocurrency aggregator Bybt reveal the open interest in ETH futures experiencing a 20x-times hike within the same period and now sits at over $7.68 Bln as at the time of reporting.
Amid the growing institutional demand for ETH, Two Prime also predicted that Ethereum will decouple significantly from Bitcoin [
BTC] price action.
The two Prime reports also maintained that the involvement of big-money players will cause
a gentle decrease in realized volatility.
Additionally, in another example of the apparent hike in institutional appetite for Ethereum, the CoinShares “Digital Asset Fund Flows Weekly”
report saw ETH bucking the trend of investment product outflows for cryptocurrencies.
In line with the cryptocurrency investment manager’s report earlier on Monday, ETH saw $34 Mln in investment product inflows for the past week. This figure puts
the entire ETH inflow for cryptocurrency fund managers at $792 Mln - about 8% of
the entire asset under management for these funds,
consistent with CoinShares.
The $34-Mln ETH investment inflow came amid Bitcoin’s lowest weekly inflow numbers since October last year. Indeed, fund movements were primarily outflows for BTC, with $21 Mln [the largest weekly outflow recorded] moving
the other way.
As reported earlier in February, ETH represented about 80% of the institutional cryptocurrency inflows
within the primary week of the month.
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