Bitcoin had dominated as the leading crypto-currency options asset in the space, with billions of dollars invested in it. However, the tide began to turn in the third quarter of 2022, when a major update regarding the Ethereum merger triggered a wave of interest in Ether options.
Options for Ethereum to overtake Bitcoin
Ether options made their market debut in January 2020 and have grown steadily since then. However, no matter how much Ether options grew, bitcoin options remained higher as open interest in crypto poured into the pioneering crypto-currency. Then, in July 2022, Ethereum developers made an announcement about upgrading the network to a proof-of-stake mechanism, which would completely change the game.
By July, interest in Ether options had exploded, leading to a meteoric rise. It reached a new all-time high of $8.1 billion, more than 50 percent higher than bitcoin at the time, with a open interest of $5.4 billion. To this day, Ether options remain on an impressive uptrend, continuing to outperform bitcoin.
This is the first time that Ethereum’s open interest has risen more than bitcoin’s, and it’s all thanks to the long-awaited Ethereum merge.
Is the flippening imminent?
The “flippening” is a word that means that the value of Ether exceeds that of bitcoin. This school of thought has mostly emerged as a result of ETH’s price performance outperforming BTC on an annual basis. As a result, some investors expect the digital asset to replace bitcoin at some point to gain value.
There is no set timeline for when this reversal is expected to occur. However, whenever the ether surpasses bitcoin on any measure, the reversal debate begins. The same has been true with ETH options, which have become more important than BTC.
Currently, the price of BTC is still more than 10 times that of ETH. So for a reversal to occur, ETH would have to rise 1,000% while the price of BTC remains unchanged. This is unlikely to happen, as the market actually moves with the price of BTC.
However, as the merger gets closer and the so-called “triple reduction” is imminent, ETH is likely to further narrow the gap between it and bitcoin. This event would see a decrease in the supply of ETH in the market, giving it a truly deflationary model to compete with the limited supply of bitcoin.