Ethereum Options Open Interest Reach New ATH As Merge Date Confirmed
Timothy Fries | Aug 12, 2022 01:19PM ET
Ethereum options’ open interest (OI) set a provisional date for the Merge for Sept. 19.
A new peak in Ethereum options open interest comes just after the blockchain completed its third and final public testnet merge , Goerli, coming just one step away from the mainnet merge. After completing the Goerli testnet merge, Ethereum’s gas fees plummeted to their lowest mark in more than a year.
It’s been a stellar couple of weeks for Ethereum, with its native token rising more than 60% in the past month. However, the cryptocurrency still remains down over 60% from its all-time high in November 2021.
Derivative speculators are accumulating call options as they expect Ether to continue its uptrend into September when the Merge is most likely to occur. However, futures and options numbers are indicating that crypto traders are bracing for another price drop in ETH after the Merge, which Glassnode analysts describe as a “sell-the-news”-type of situation. But Ethereum co-founder Vitalik Buterin recently said the upcoming Merge is not priced yet and will not be “until after it happens.”
h2 Why Is Merge So Important?/h2“Post Merge, the left tail is pricing in significantly higher implied volatility, indicating traders are paying a premium for ‘sell-the-news’ put-option protection post-Merge.”
– Glassnode analysts
Earlier this week, Ethereum successfully completed its final testnet merge known as Goerli. This marked the last important development for the blockchain before it transitions from proof-of-work (PoW) to the proof-of-stake (PoS) model next month.
This transition, which represents a groundbreaking upgrade for Ethereum, is set to slash the blockchain’s energy use and carbon emissions by 99%. It will also make Ethereum no longer reliant on miners and instead allow individual users to stake the native tokens and become the so-called “validators.”
While everyone in the crypto world is excited about the Merge, there are some who are not convinced that the upgrade will occur seamlessly. Galois Capital’s Kevin Zhou thinks it is “very dangerous” not to consider the outcome if the update doesn’t go as smoothly as expected. He also believes the current PoS chain would represent 5% of Ethereum’s value after the Merge, while the new PoS would make up 95%.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.