Investor demand for leveraged Ether-based trading products is skyrocketing, showcasing increasing momentum that could take the world's second-largest cryptocurrency above the $4,000 psychological mark.
Demand for the VolatilityShares 2x Ether exchange-traded fund (ETF) rose over 160% since November 5, with the ETH equivalent exposure increasing by 278,150 ETH. VolatilityShares now holds over half of CME's ETH open interest at 50.1%.
This surge in demand coincided with the recent U.S. presidential election results, which bolstered investor appetite for risk assets like cryptocurrencies. While Ether's price has lagged behind Bitcoin, analysts expect a turnaround, predicting Ether could reach $20,000 at the peak of the 2025 bull cycle.
Recent price gains are attributed to spot buying pressure rather than speculative activity, indicating further upside momentum for Ether. The implied volatility of 1-day options remains stable, suggesting that the recent breakout above $3,600 was driven by accumulation.
November's record stablecoin inflows to exchanges are also expected to support Ether's price rally. Continued net inflows of stablecoins are providing liquidity to the crypto market, enhancing market momentum.
Bitcoin's price briefly reached an all-time high of $99,800 on November 22 before correcting above $91,000. Analysts speculate that Bitcoin's range under $100,000 could act as a positive catalyst for Ether's price, potentially enabling a flow of capital into smaller altcoins.