After the United States’ November 5 presidential election, Ether (ETH) has taken center stage, outperforming Bitcoin (BTC) in both spot and derivative markets. According to a December 2 report by crypto exchange Bybit, ETH’s momentum continues to grow.
Growing Demand for ETH Options Indicate Increasing Favoritism
In November, Ether experienced significant traction against BTC, as evident from the sharp drops in the ratio between their spot prices. This trend is highlighted in Bybit’s November 2024 ‘Volatility Review,’ co-created by market researcher Block Scholes.
Growing demand for ETH options also indicates that traders are increasingly favoring ETH. As stated by Bybit:
[T]raders are increasingly favoring ETH
This shift in trader preference has been reflected in the increasing ratio of ETH to BTC in spot markets. The current ratio stands at over 0.04, a significant increase from its November 21 value of approximately 0.0325.
US SEC Chair Gary Gensler’s Resignation Accelerates Ether’s Outperformance
Ether’s outperformance accelerated after US Securities and Exchange Commission (SEC) Chair Gary Gensler announced plans to step down on November 21. This development brought additional momentum and attention to the asset, according to Bybit.
Since then, ETH’s recent move has been sustained, indicating a growing confidence in the asset among investors.
Source: CoinStats
Related: SEC Chair Gary Gensler to Step Down
Is Altseason Here?
Bybit noted that Ether’s mounting dominance is most evident in spot markets, where the ratio of ETH to BTC has risen significantly. Hartmann Capital founder Felix Hartmann believes this pivot from BTC to ETH signals that Wall Street is officially joining the fun on the "alt rotation."
During the week of November 26, Bitcoin funds saw outflows of $457 million – the first significant outflows since September – while ETH funds saw inflows of $634 million during the same period. This trend indicates a growing preference for Ether among institutional investors.
Overall Market Dominance: A Shift Towards Altcoins
Bitcoin’s crypto market dominance has been waning, falling from a high of over 58% on November 21 to less than 52% as of December 6. This decline in dominance highlights the increasing popularity of altcoins, including Ether.
Expecting Volatility
Traders are bracing for a rise in ETH volatility, according to Bybit. In November, options markets experienced a surge in ETH volatility that points to a stronger demand for ETH optionality than BTC.
Bybit noted:
[W]e must highlight that this is a return to usual programming for the pair, rather than an unusual dislocation
ETH has throughout its history moved with high correlation but larger volatility than BTC. This trend indicates that traders are increasingly willing to take on more risk in pursuit of higher returns.
Conclusion
Ether’s outperformance and growing dominance in spot and derivative markets indicate a significant shift in market sentiment. As the crypto space continues to evolve, it is essential for investors to stay informed about market trends and developments.
To stay ahead of the curve, subscribe to our Markets Outlook newsletter, which provides critical insights to help you spot investment opportunities, mitigate risks, and refine your trading strategies.
Subscribe Now
By subscribing, you agree to our Terms of Services and Privacy Policy.
