Even though Bitcoin has reached a market capitalization greater than $1 trillion, the cryptocurrency markets offer other attractive trading options such as Ethereum, a digital currency that recently pushed through the $2,000 exchange price level. Major players such as investment banking firms are starting to take chances on ETH, and this has resulted in a substantial increase in terms of daily trading volumes.
This is also evident in the overall volume of trades reported in the ETH/USD daily chart on CoinMarketCap, the leading market tracker for digital currencies. Data from CoinMarketCap suggests, that ETH is ripe for trading strategies such as call option contracts that offer a way to speculate on digital currency markets without putting too much "skin in the game."
Cryptocurrency exchange platforms are starting to offer ETH option contracts that are generally more affordable than Bitcoin futures traded on the Chicago Mercantile Exchange. The current strike price on a call option scheduled for March 26 costs less than $350 if ETH climbs above $2,180 over the next month or so. Naturally, if the ETH rally stalls, the option contract would expire and become worthless; this would also entail the trader losing the money invested in order to write the option.
Traders who base their positions on technical analysis are seeing more ETH options being taken, and investors are making use of both put and call transactions. In some cases, multiple options are being written by savvy investors who hedge their positions in order to make the most out of them. This diversity of trading activity is certainly good news for market participants because of the aforementioned trading volume, but it also calls into question the future of ETH.
It is important to remember that the lead developer of the Ethereum blockchain has repeatedly mentioned his disdain for speculative investing. The ETH token is used to raise funds that benefit the continued development of the ERC20 blockchain, but its practical use as a digital currency is just a fraction of what Bitcoin has accomplished in terms of circulation. Even a centralized business token such as Ripple is getting more circulation. In other words, ETH is becoming a digital investment commodity, which is something it was not originally intended to be.