Ether Futures' Popularity Skyrockets after Shanghai Upgrade

After Ethereum implemented the highly-anticipated Shanghai upgrade on April 12, adoption of ether has skyrocketed, CoinDesk wrote. The upgrade reduced the risk of staking ether by allowing people to withdraw locked assets whenever they want. Institutions are taking up ether en masse as a result.

Open ether futures up 40% in a week

The number of open ether futures contracts on the Chicago Mercantile Exchange (CME) has increased by 39% in just over a week. This corresponds to an increase of open interest of over 70% to $633 million.

Typically, institutions prefer CME futures and other regulated products that give them exposure to digital assets without having ownership of them. Due to this, CME futures tied to leading cryptocurrencies are widely regarded as a proxy for institutional activity.

According to Noelle Acheson, who writes the newsletter Crypto is Macro Now, the past several days have seen rising interest in ether futures from institutions. He said:

USD open interest is now at its highest since March 2022, and just before the weekend, ETH futures open interest on the CME jumped over 80% in USD terms.

According to CoinDesk data, an asset price increase and parallel growth of open interest indicate an influx of fresh funds. Since the Shanghai upgrade, Ether's price has increased by 8%.

A long-term bullish trend

The futures basis has become wider. This is the difference between spot market prices and prices in futures. The combination of an increasing basis and rising open interest indicates leverage is on the bullish side.

Activity on multiple exchanges has become more dynamic after the upgrade, which could show that it’s not just institutions flocking to the market.

According to TDX Strategies CEO Dick Lo, there has been a record high in open interest on crypto exchange Deribit, which suggests there is no conclusive evidence that only institutions are buying.