Ethereum's spot and futures volumes are rising faster relative to Bitcoin's

With the recent hype surrounding various Open Finance protocols, ETH/BTC price ratio is up 112% since September 2019; from 0.0162 BTC to 0.0343 BTC. However, ETH/BTC is still down 78% from its all-time high of ~0.155 BTC in June 2017.

Bitcoin’s market cap is still about 4.8 times higher than Ethereum’s. One interesting indicator, which is often overlooked, is the ratio between the traded volume of Bitcoin and Ethereum on centralized exchanges. When the ETH/BTC volume ratio rises, it indicates that traders are trading Ethereum more relative to Bitcoin and that’s a good proxy of interest.

Spot exchanges

In this exercise, it’s important to avoid exchanges that fake volume. In order to get a proxy for the entire market, I used five of the largest exchanges — Binance, Coinbase, Bitfinex, Bitstamp, and Kraken. 

Throughout the last year, Ethereum’s daily traded volume surpassed Bitcoin’s only three times. The 30-day rolling average, shown below, is hovering around 50% today, which means that Bitcoin’s traded volume is twice as high as Ethereum’s. That’s a similar level to a few days in early March, which was right before the massive liquidity crunch caused by the panic surrounding COVID-19 during which both Bitcoin and Ethereum crashed by around 50% in a matter of several hours.

Looking at the ETH/BTC spot volume ratio from the five exchanges, the ratio has grown from about 16% in September 2019 to about 50% now.

Source: CryptoCompare, The Block Research

The highest volume ratio was reached in June/July 2017 when Ethereum’s volume frequently surpassed Bitcoin’s. Since 2018, the ratio has fluctuated from 30% to 80%.

Futures exchanges

Ethereum’s daily traded volume of futures has yet to surpass Bitcoin’s volume. The 30-day rolling average, shown below, is hovering around 30% today, which means that Bitcoin’s futures volume is a little more than three times as high as Ethereum’s. Similarly to spot, the current levels are similar to early March.

The ETH/BTC futures volume ratio has grown from about 8% in September 2019 to about 29% now.

Source: skew, The Block Research

Since Skew doesn’t have data for Ethereum futures before June 2019, the current level of ~30% is the highest in our current data set.

Conclusion

The rising volumes for both spot and futures show an exciting trend for Ethereum. While the market cap is still nearly five times smaller than Bitcoin’s, the volumes for the spot are only twice smaller and the volumes for the futures about three times smaller. This could indicate that there is further room to grow of Ethereum’s price in terms of BTC.

Update (August 4): This report has been updated with additional information on ETH/BTC spot and futures volumes ratios.