In 2024, the landscape of cryptocurrency markets continues to evolve with significant shifts in investor sentiment and market dynamics. As per Kaiko report, recent developments have underscored Ethereum’s (ETH) resilience despite a notable price correction, while anticipation mounts for the launch of spot ETFs.
Since the SEC’s approval of spot ETH ETFs in May, there has been a delay in their actual trading commencement, coinciding with ETH’s decline of nearly 20% over the period. This pullback, however, belies underlying indicators suggesting a robust outlook post-ETF launch.
One key metric, the ETH to BTC ratio, currently stands elevated at around 0.05, up from pre-approval levels of approximately 0.045. This elevated ratio indicates a potential for ETH to outperform BTC following the ETF launches, buoyed by favorable market conditions. Liquidity, measured by ETH’s 1% market depth, has also remained steady around $230 million post-approval, showcasing resilience despite earlier volatility.
Conversely, perpetual futures markets have experienced cooling trends, marked by halving funding rates since May and a decline in open interest from highs around $11 billion. This shift suggests reduced trader conviction amid uncertainty surrounding the ETF launch timelines.
Implied volatility (IV) for near-term ETH options has seen a sharp uptick, reflecting heightened uncertainty among traders seeking to hedge against short-term price fluctuations.
Beyond ETH, the cryptocurrency landscape also sees Bitcoin (BTC) strengthening its appeal as a treasury asset among corporate entities. Inspired by pioneers like MicroStrategy and Tesla, several companies have begun diversifying their balance sheets into BTC. This move, influenced by regulatory advancements and increased market acceptance, has varied in impact across different firms, with notable correlations observed between their stock prices and BTC’s daily returns.
In the perpetual futures market, BTC and ETH maintain dominance both in trading volume and derivative offerings compared to other cryptocurrencies. While altcoins like SOL and ADA have seen increased perpetual futures contracts, BTC and ETH continue to lead, reflecting their established market positions and investor confidence.
Bitcoin’s Potential Surge Amid Geopolitical Uncertainty and Ethereum ETF LaunchDecentralized exchanges (DEXs) have also seen renewed interest, albeit maintaining lower volumes compared to centralized exchanges (CEXs). Platforms like Uniswap, despite facing challenges from competitors during market rallies, have sustained a significant market share, indicative of ongoing demand for non-custodial trading solutions.
