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Ether Soars to New All-Time High and JPMorgan Notices
JPMorgan points to better liquidity conditions as reasons behind ETH's outperformance relative to BTC, which could provide a tailwind.
Updated Mar 6, 2023, 3:14 p.m. Published Apr 28, 2021, 2:56 p.m.
Ether (ETH), the second-largest cryptocurrency by market cap, soared Wednesday to a new all-time high near $2,700, at the time of writing. That has inspired traditional Wall Street firms to provide investment-research coverage.
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JPMorgan, in a report Tuesday titled “Why is ETH outperforming?”, suggests the cryptocurrency's valuations may be less dependent on demand from leveraged traders than for bitcoin (BTC). That might provide an important tailwind.
- “Both BTC and ETH markets experienced comparable liquidity shocks earlier this month, which triggered a comparable de-leveraging of their respective derivatives markets in subsequent days," according to the JPMorgan analysts.
- However, ether's spot-market depth has recovered quicker than bitcoin's, according to JPMorgan. “Open interest data also suggests that the other side of these trades were easier to source,” suggesting better liquidity conditions in ETH futures relative to BTC futures.
- “Higher turnover on the public ETH blockchain means a noticeably higher fraction of those tokens can be considered highly liquid, further blunting the impact of futures liquidations.”
- The more resilient bid for ETH futures has allowed for a more rapid recovery in liquidity relative to BTC.
- “In combination with the continued growth for DeFi and other components of the Ethereum-based economy, this suggests some technical but occasionally important bullish tailwinds versus bitcoin," wrote JPMorgan.
On Monday, CoinDesk reported JPMorgan is preparing to offer an actively managed bitcoin fund to private wealth clients despite CEO Jamie Dimon’s historic disdain for the cryptocurrency.
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Solana CME Futures Fell Short of BTC and ETH Debuts, but There's a Catch
When adjusted for asset market capitalization SOL's relative futures volume looks better, K33 Research noted.
What to know:
- Solana's SOL futures began trading on the Chicago Mercantile Exchange (CME) on Monday, with a notional daily volume of $12.3 million and $7.8 million in open interest, significantly lower than the debuts of bitcoin (BTC) and ether (ETH) futures.
- Despite the seemingly lackluster debut, when adjusted to market value, SOL's first-day figures are more in line with BTC's and ETH's, according to K33 Research.
- Despite the bearish market conditions, the launch of CME SOL futures offers new ways for institutions to manage their exposure to the token, said Joshua Lim of FalconX.
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