Ether Losing Its Edge? Options Market Signals Higher Risk for ETH Than BTC in 2025
Is the crypto crowd cooling on Ethereum? The derivatives market just flashed its starkest warning yet—traders are now pricing ETH as riskier than Bitcoin for the first time since the Merge.
Options traders pile into hedges as ETH volatility premium overtakes BTC
Implied volatility spreads don’t lie: Ether’s premium hit a 12-month high this week while Bitcoin’s sank to post-halving lows. The smart money’s betting on bigger swings ahead—whether from ETF delays, scaling bottlenecks, or that pesky ‘ultrasound money’ narrative unraveling.
Meanwhile, Bitcoin maximalists are (predictably) crowing about ‘flippening in reverse.’ Never mind that both assets still trade like tech stocks on Red Bull—some things never change in crypto-land.
In comparison, bitcoin's short-term put options traded at 1%-2.5% premium to calls, suggesting relatively restrained downside fears.
A put option gives the purchaser the right to sell the underlying asset at a predetermined price on or before a specified future date. A put buyer is implicitly bearish on the market, seeking to hedge spot market holdings or profit from a price decline. A call buyer is implicitly bullish on the market.
The 25-delta risk reversal is an options strategy that comprises a long put position and a short call option (or vice versa) with a 25% delta, meaning the strike price for both options is relatively far from the underlying asset's market rate.
Risk reversals are widely tracked in the FX markets to gauge sentiment across time frames. Positive values represent bullish sentiment, while negative values suggest the reverse.
Ether, the native token of the ethereum blockchain surged 48% in July, reaching a seven-month high of $3,941 and outperforming BTC's 8% gain by a wide margin. Most of the advance, however, occurred in the first half of the month, with the rally losing steam on concerns it stemmed purely from corporate adoption and lacked support from on-chain activity.
Ether was recently trading at $3,600, down more than 6% over 24 hours, while Bitcoin had lost 3% to $114,380, according to CoinDesk data.
