Ethereum's ETH Token Surges 8% as Institutional Interest and Macro Factors Drive Market Favorability

Ethereum's ether token, which has long been overshadowed by bitcoin, is now emerging as a favored asset among traders. The spread between the annualized 30-day ether implied volatility index (EVIV) and bitcoin's 30-day index (BVIV) has surged to 34%, marking the highest level since November 2022, when the FTX exchange collapse led to significant investor losses.

The widening gap suggests that the market anticipates more substantial price fluctuations for ether and potentially the broader crypto market compared to bitcoin in the coming weeks. This shift in market sentiment is driven by several factors, including renewed institutional interest in ether. In the past 24 hours, ether has seen an 8% increase to $2,728, outperforming most major cryptocurrencies, including bitcoin, which gained only 1%.

According to Alex Kuptsikevich, chief market analyst, the surge in ether's price is partly due to significant inflows into Ethereum ETFs, which have attracted $812 million over the past two weeks, the highest amount since the beginning of this year. In contrast, BTC ETFs have drawn in less than $400 million during the same period.

Several macroeconomic factors are also aligning in favor of ether. The GENIUS Act advancing in the US Senate, Circle’s IPO discussions resurfacing, and stablecoins gaining regulatory traction are all contributing to a positive outlook for Ethereum. Ethereum's role in tokenization and settlement rails may be poised for significant structural gains, according to a market update.

The preference for ether is further evident in the options market. On the Deribit exchange, ETH call options are trading at a premium of at least 2% to 3% relative to puts out to the March 2027 expiry, while BTC calls are trading at a 0.5%-1.5% premium. This indicates that traders are willing to pay more for upside exposure in ether compared to bitcoin.

Additionally, the 30-day call-skew for ETH options has hit 6.24%, and funding rates have spiked to 0.009%. The term structure of volatility has also reinverted, reflecting the heightened interest and optimism surrounding ether. This shift in market dynamics underscores the growing favorability of ether among traders, driven by both institutional interest and favorable macroeconomic conditions.