Ether stands out relative to BTC as the go-to major currency for traders looking to amplify returns with the use of leverageThe so-called ETH leverage ratio is significantly higher than that of BTC.
Ether's estimated leverage ratio, which measures the degree of leverage employed by traders, climbed to a new high of 0.57 on Wednesday, marking a significant increase from 0.37 at the start of the final quarter of 2024, data tracked by analytics firm CryptoQuant shows. A rising ratio suggests that traders are increasingly using leverage, indicating a surge in risk-taking and market speculation. Leverage enables traders to control bigger positions in the market with a relatively small pool of capital.
Ether's leverage ratio of over 0.5 means a significant amount of leverage trading is happening in the futures market relative to the availability of actual coins in the exchange wallets.