With the recent shift in market sentiment, options traders now expect more significant price movements for Bitcoin compared to Ethereum. This change reflects a potential preference for BTC over ETH in the short term.
The highly anticipated trading of Ethereum spot ETFs began on Tuesday. However, the expected market volatility did not materialize.
Analysts from QCP Capital noted that Bitcoin options now have higher implied volatility than ETH options. This observation suggests that investors expect further price movement for BTC in the short term. “Ethereum volatility has sold out across term structures and ETH's BTC vols premium on the front end has finally reversed, with BTC 1-week and 2-week options currently trading 1 to 3 points higher than ETH,” QCP Capital analysts said.
The newly launched and much-anticipated spot Ethereum ETFs saw net inflows of over $107 million on the first day of trading. This performance was significantly lower than the net inflow of $655 million on the first day of trading for spot Bitcoin ETFs. One factor contributing to the decline in capital flows into Ethereum ETFs was a $484 million outflow from Grayscale's converted Grayscale Ethereum Trust (ETHE) on the first day of trading.
Despite this, QCP Capital analysts maintain a positive outlook for ETH in the medium and long term. “Bitcoin reaching an all-time high two months after the ETF launch sets an intriguing precedent. With the expectation that institutional interest will continue, Ethereum's price trajectory may gradually approach its previous all-time high,” he added.
*This is not investment advice.