In the high-stakes game of crypto options trading, the tea leaves are signaling more pain ahead for the ether-bitcoin ratio. Even as President Donald Trump took the oath of office for his second term on Monday, notably omitting any mention of the much-rumored strategic bitcoin reserve, savvy derivatives traders were already positioning for BTC to outperform ETH in the days and weeks to come.
The writing was on the wall in the options markets, where bitcoin calls traded at a hefty premium to ether calls across multiple time frames, according to data from crypto derivatives platform Deribit. This persistent bullish bias for BTC relative to ETH came despite the lack of any crypto bombshells in Trump’s inaugural address, which some pundits had predicted could include the unveiling of a national bitcoin stockpile to rival China’s digital yuan ambitions.
Options Traders Bet on Bitcoin Dominance
The preference for bitcoin over ether was particularly evident in the near-dated options, with one-week BTC calls trading at a five volatility point premium to puts, indicating a decisively bullish stance. By contrast, the premium for ETH calls versus puts was markedly lower, signaling more bearish sentiment for the second-largest cryptocurrency.
This dynamic suggests that options traders see the ether-bitcoin ratio, which slumped to a three-year low near 0.03 in recent sessions, as likely to face continued downside pressure in the near term. The absence of a clear crypto catalyst from the White House, combined with indications that bitcoin remains the primary focus for institutional investors, appears to be bolstering the case for BTC to extend its dominance over ETH.
Decentralized Markets Lose Confidence in BTC Reserve Rumors
Adding to the subdued outlook for ether was the sharp drop in expectations for a U.S. strategic bitcoin reserve announcement on decentralized betting platform Polymarket. The implied probability of Trump unveiling a BTC stockpile in his first 100 days in office plunged to 38% after the speech, down from nearly 50% just a day earlier.
The diminished prospects for an official bitcoin endorsement, coupled with reports that crypto was absent from the GOP’s list of legislative priorities, may be contributing to the view that BTC will continue to outpace ETH as the market grapples with a more challenging regulatory environment. While bitcoin’s status as an inflation hedge and store of value could help insulate it from policy headwinds, ether’s ties to the DeFi and NFT booms could leave it more vulnerable to shifts in sentiment.
Charting the Path Forward for ETH/BTC
For crypto traders and investors, the key question is whether the current preference for bitcoin over ether in the options markets presages a more protracted period of underperformance for ETH/BTC. While some analysts see scope for a short-term bounce in the ratio after its steep descent, the broader trend appears to favor further BTC outperformance in the absence of a major fundamental catalyst for ether.
As the crypto market continues to mature and attract a broader base of institutional participants, the relative value propositions of bitcoin and ether are likely to come into sharper focus. With BTC increasingly viewed as a macro asset and long-term store of value, and ETH’s fortunes more closely tied to the vicissitudes of the smart contract economy, the divergence in their underlying narratives could become more pronounced over time.
For now, the message from the options market is clear: bitcoin remains the crypto king, and ether may face an uphill battle to reclaim its crown any time soon. As the dust settles on the inauguration and the market digests the implications of a second Trump term, the interplay between BTC and ETH will be a key dynamic to watch in the ever-evolving crypto landscape.
