For the first time ever, Ethereum futures surpass Bitcoin with a $1 trillion market cap.
As Ethereum has recently led the market in gains, the market competition between the top two cryptocurrencies, Bitcoin (BTC) and Ether (ETH), has intensified. The performance of the ETH futures market surpassed two previous records in August.
In the month, the volume of ETH futures surpassed $1.07 trillion. Only twice in Ethereum's existence has the volume of its futures contracts exceeded $1 trillion. The volume of ETH futures has also overtaken that of Bitcoin, which reached $941 billion, for the first time in the history of the cryptocurrency market.
Tom Rodgers, head of research at London-based ETC Group, a specialist provider of crypto-backed products, wrote a paper claiming that the incident is a sign of increased liquidity in the Ethereum market and is highly desirable from a trading standpoint. This is due to the indication that ETH's recent price increases will last for some time.
"Greater liquidity in one asset or another is a result of higher volume, which is good from a trading standpoint because there are many buyers and sellers. That would imply that Ethereum's upward movement of 16% since August 29 will proceed quickly "wrote the expert.
He did, nonetheless, issue a warning that volatility might also push the market lower. Higher levels of trader liquidations are anticipated given the rising open interest statistics for both BTC and ETH derivatives.
Is the Bitcoin-to-Ethereum conversion imminent?
ETH futures volume surpassing BTC's for the first time ever has been cited by Ethereum bulls as one of the signals of the flippening, the point at which the market capitalization of ETH would surpass that of BTC, which may soon occur, according to a Fortune report.
These supporters predict that the flipping will occur after the Ethereum blockchain switches to a proof-of-stake (PoS) chain. The market capitalization of ETH, at $208 billion, is roughly 51% of the market capitalization of BTC, at $404 billion, according to data from BlockchainCenter, so this hypothetical occurrence might still be a ways off.
The performance of Ether and Bitcoin in the spot markets has also demonstrated that there is currently more fervor in the ETH market.
The spot price of ETH has increased 5.21% over the past week to currently trade at over $1,700 per day. BTC, in contrast, has grown by 3.67% during the same time period. The performance of ETH has been correlated with interest in the merging upgrade planned for later this September.