Institutional Bias Shifting Toward Ether as Market Signals Turn Bullish
Key market indicators suggest that traders — particularly institutional players — are increasingly favoring Ethereum (ETH) over Bitcoin (BTC), marking a potential shift in sentiment within the crypto derivatives landscape.
Derivatives Markets Show Growing Preference for Ether
Despite Bitcoin climbing to new all-time highs above $110,000 and posting a 16% year-to-date gain, derivatives data points to a rising bullish tilt toward Ether, currently trading at $2,661.90. In contrast to BTC’s strength, ETH has declined by nearly 20% this year, even as the Ethereum network continues to lead in decentralized finance (DeFi) and tokenization activity.
However, several key metrics from the futures and options markets — which often serve as a proxy for institutional sentiment — indicate growing optimism for Ether and hint at a possible narrowing of this performance gap.
Options Markets Highlight Bullish ETH Sentiment
Data from Deribit, the leading crypto options exchange, reveals that both BTC and ETH 25-delta risk reversals are currently positive, meaning traders are leaning more toward buying call options — a bullish stance.
Yet, the pricing of these risk reversals is notably skewed in Ether’s favor. ETH calls are commanding higher premiums than BTC calls, signaling relatively stronger demand for upside exposure to Ethereum. In short, option traders are placing a larger bullish bet on ETH than on BTC.
CME Futures: Institutions Increasing Exposure to Ether
Open interest in CME Bitcoin futures has surged roughly 70% since early April to over $17 billion, according to data from Velo. However, this growth has plateaued over the past week, suggesting a cooling in new institutional positioning.
Conversely, CME Ether futures have seen a dramatic 186% increase in notional open interest, reaching $3.15 billion — with the pace of growth accelerating significantly over the past two weeks. The CME is widely regarded as a barometer of institutional activity, and this divergence implies that large investors may be reallocating attention — and capital — toward Ethereum.
Futures Premiums and Funding Rates Support ETH Bull Case
Further evidence of ETH bias can be found in the futures premiums and perpetual swap funding rates. One-month ETH futures are trading with an annualized premium of 10.5%, the highest since January. In contrast, BTC futures show a lower premium of 8.74%.
Higher premiums typically indicate strong buying interest and bullish sentiment. The fact that ETH futures are trading richer than BTC futures adds weight to the thesis that market participants expect stronger upside in Ethereum.
A similar divergence is observed in perpetual futures markets on offshore exchanges. ETH funding rates — which reflect the cost of holding long positions — have risen to nearly 8%, while BTC’s remain under 5%. This reinforces the notion that traders are increasingly willing to pay a premium to stay long on ETH.
It’s also worth noting that Bitcoin’s futures basis may be artificially suppressed by arbitrage strategies such as cash-and-carry trades, which are direction-neutral and do not reflect outright bullish conviction.
Conclusion
Despite trailing Bitcoin in price performance this year, Ether appears to be regaining favor among institutional and derivatives traders. The combination of rising option premiums, accelerating CME open interest, and elevated futures pricing suggests that the market may be positioning for a stronger ETH recovery — one that could close the performance gap and potentially challenge ETH’s previous highs.
