Ethereum Derivatives Trading Is Surging

• Ether derivatives trading is surging amid increased interest.
• Large traders increasingly speculate on the cryptocurrency’s upcoming transition.
• Open interest in ether options across top-tier exchanges increases.

The value of ether, the native cryptocurrency of the Ethereum network, has surged in recent months as the network has become increasingly popular with developers and businesses. Interest in ether derivatives, which allow investors to bet on the future price of the currency, has also been growing rapidly.

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Ether-based derivatives are heating up as large traders increasingly speculate on the cryptocurrency’s upcoming transition from proof-of-work to proof-of-stake. Large hedge funds and other institutional investors also have been increasingly active in ether derivatives trading in recent weeks, according to data from crypto research firm Skew.

The surge in interest from institutional investors comes as Ethereum is gaining traction as a platform for so-called decentralized applications, or Dapps. Many of the most popular apps, such as those built on the uniswap protocol, are based on Ethereum.

The rise in ether derivatives trading also comes amid speculation that the cryptocurrency could be added to the CME’s Bitcoin futures contract. Ether is currently the second-largest cryptocurrency by market value, behind only Bitcoin.

The CME has not yet announced any plans to add ether to its Bitcoin futures contract. However, the growing interest in ether derivatives trading suggests that there is significant demand for such a product.

In other updates, the aggregate open interest of ether options across top-tier exchanges increased from $2.74 billion on July 2 to more than $7 billion on July 29. It currently stands at $5.9 billion. Open interest indicates the value of all outstanding contracts that have yet to settle.

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