The ETH/BTC ratio has risen above 0.037, reaching an annual high, according to a new report by K33 Research, as reported by The Block.
Ethereum is outpacing Bitcoin in growth rates. Since June, Ether has surged by 70%, while the leading cryptocurrency has increased by 9%. However, the weakening correlation with traditional assets and active risk hedging in the derivatives market create conditions for sharp price fluctuations, analysts noted.
According to them, the main driver of Ether’s rally is “dual demand.” On one hand, ETFs based on the asset have attracted $9.4 billion in two months. On the other, corporate treasuries have accumulated more than 2% of the total Ethereum supply.
Over time, exchange-traded funds and public companies have absorbed more than 8% of the issuance of the second-largest cryptocurrency by market capitalization.
Analysts emphasized that leveraged products have particularly attracted investor interest. The 2x leveraged ETF from VolatilityShares has attracted 456,000 ETH and now represents 61% of the open interest on the CME.
What about Bitcoin?
Bitcoin has shown dynamics opposite to Ethereum. Following the release of the producer price index, which rose by 0.9% in July against the expected 0.2%, the price of the leading cryptocurrency sharply dropped from $121,000 to $115,000.
Futures premiums on the CME, which previously reached double digits, have fallen to 5.5% annually. Open interest on the exchange has risen to 143,000 BTC but remains at early May levels. The figure in the perpetual futures market is nearly twice as high at 300,000 BTC.
Meanwhile, the imbalance in options pricing has reached a two-year high. This indicates active risk hedging by traders, K33 stated.
In the spot Bitcoin ETF segment, the situation is also mixed. By the end of the second quarter, the volume of assets under management by exchange-traded funds reached a record $134.6 billion.
However, in August, cash flows weakened, while Ethereum-based products continue to attract capital. According to analysts, this imbalance, combined with the decreasing correlation of cryptocurrencies with traditional assets, could lead to increased volatility and sharp price movements in any direction.
Back in August, the head of Bitwise’s European research department, Andre Dragos, predicted Bitcoin’s rise to $200,000. He stated that this would be facilitated by the inclusion of digital assets in US pension plans.