Ethereum Futures See Record Highs Post Spot ETF Approval

By: Eliza Bennet

The approval of spot Ethereum ETFs in the US has sparked a significant surge in the Ethereum derivatives market, particularly in futures. Despite the anticipation, the approval did not trigger a massive rally in Ethereum's market price. However, it did provide a new level of legitimacy and accessibility, as reflected by the increased activity in the derivatives market, which had been relatively stable until early this year.

At the start of the year, open interest (OI) for ETH futures was just under $7 billion, with options OI at $6.45 billion. By the end of March, as Ethereum’s price rose, futures OI grew to $10.57 billion, and options OI increased to $10.72 billion. The anticipation of ETF approvals from late April further accelerated these numbers.

As of May 28, futures OI reached an all-time high of $17.12 billion, influenced by significant speculative activity. Binance leads the market with $6.24 billion in futures OI, followed by Bybit and OKX. Notably, CME has $1.3 billion in open interest, reflecting substantial institutional participation attracted by its regulated environment.

Volatility Shares has announced that its 2x Ether Strategy ETF (ETHU) will become the first leveraged crypto ETF available in the United States, set to begin trading on June 4. This development is anticipated to further boost market dynamics.

In a broader market perspective, Bernstein projects that Bitcoin and Ether ETF markets could grow to $450 billion, with crypto exchange-traded funds expected to see over $100 billion of inflows in the next two years. This forecast underscores the growing institutional interest and the promise of substantial capital influx into the crypto market.

The marked increase in both futures and options open interest, alongside rising trading volumes on platforms like Deribit, indicates a healthy and liquid market environment for Ethereum derivatives. The advent of spot ETFs has undeniably catalyzed this growth, enhancing liquidity and attracting a broader spectrum of investors.

For more detailed information, you can refer to CoinGlass's insights on futures open interest and their data on options open interest.