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Ethereum Derivatives Trading Volume Surpasses Bitcoin

Ethereum derivatives trading grew about 10% over the last month in anticipation of the Merge, taking up to 57% of the combined bitcoin and ether futures trading volume.

In the past 24 hours alone, over $35 billion in ether futures was traded, compared to $32 billion in bitcoin futures. Furthermore, the open interest, or the number of ether contracts that have not been settled, has almost doubled to $8.43 billion this week. For the month of Sep. 2022 to date, the total derivatives volume traded for ether is around $87 billion, compared to roughly $67 billion for bitcoin, data from Coinglass shows.

Futures contracts are agreements to buy or sell an asset at a predetermined price sometime in the future. In the case of ether futures, ether becomes the asset. Contracts can be settled either through physical delivery or cash transfer. For example, when a futures contract expires, the buyer can receive physical ether from the seller, or they can accept cash, settling the contract.

Funding rates data suggest futures buying opportunity

According to an analyst from Kaiko, a provider of crypto trade data, most traders are definite strategies in light of the upcoming Merge. Investors are taking up short positions, suggested by funding rates data, anticipating that there could be problems with the Merge while taking up long positions in ether to neutralize price risk. Funding rates are payments made by traders based on the difference in price between a futures contract and the spot price of its underlying asset. A negative funding rate indicates that traders expect the market to go south but also presents a buying opportunity for futures.

Some traders are also making themselves eligible for the airdrop of new tokens from a proof-of-work Ethereum fork that some developers are reportedly working on.

If the Merge is successful, this will result
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