Ethereum futures hit record highs following spot ETF approval

While the approval of spot Ethereum ETFs in the US failed to trigger a massive rally for ETH, it sparked a significant surge in the derivatives market. The approval of spot ETFs was hailed as a major regulatory breakthrough for the crypto market, providing a new level of legitimacy and accessibility for Ethereum.

The impact of this approval is clearly reflected in the derivatives market, especially futures, which had a relatively uneventful year until the approval of the ETFs.

At the beginning of the year, open interest for ETH futures stood at just under $7 billion, with options OI at $6.45 billion. These figures were relatively stable until early March, when ETH saw its price rise significantly, reaching $3,343 on March 29.

This price surge was accompanied by an increase in futures OI to $10.57 billion and options OI to $10.72 billion. However, the real momentum started building in late April when the market began anticipating ETF approvals.

By April 29, ETH crossed the $3,500 market, and futures OI surged to $13.01 billion. Options open interest reached an all-time high of $15.34 billion — a culmination of speculative activity as traders positioned themselves to capitalize on the anticipated approval of the ETFs.

The approval of spot ETH ETFs had a profound impact on the futures market, as futures OI reached an all-time high of $17.12 billion on May 28. On the other hand, the options market has not seen such a notable increase in OI following the ETF approval.

The distribution of futures open interest across exchanges shows Binance’s dominance in the market, with $6.24 billion in open interest sitting on the exchange. Meanwhile, Bybit and OKX follow with $3.45 billion and $2.25 billion in open interest, respectively.

The significant amount of OI on CME — $1.30 billion — shows a solid amount of institutional participation in the Ethereum derivatives market, most likely attracted by the regulated environment CME offers.

While options OI remains lower than futures, options trading generally mirrored the trend we’ve seen with Ethereum futures. Options OI peaked at $13.44 billion on May 24, and despite the slight pullback to $12.67 billion by May 28, the overall trend remains upward.

The volume of ETH options on Deribit shows just how high the interest in derivatives is. Options volume reached an all-time high of $3.38 billion on May 22 — a significant increase to the $144 million in volume options saw at the beginning of the year.

As such a high volume had a minimal impact on ETH’s price at the time, it shows that Ethereum’s derivatives market has become quite robust with significant liquidity.

The significant increase in futures and options OI, coupled with rising trading volumes on Deribit, shows a substantial influx of capital and interest into Ethereum derivatives. Last week’s approval of spot ETFs definitely acted as a catalyst for this growth, enhancing market liquidity.

While the options market remains tied to Deribit, the distribution of futures open interest across exchanges shows just how competitive the market has become. It highlights the role different exchanges have in accommodating increased activity in futures trading — Binance’s dominance shows its appeal to retail traders, while CME’s substantial OI points to a growing appetite among institutional and sophisticated investors.

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