The upsurge in institutional interest in Ethereum continues, as JP Morgan reveals big-money investors are placing more stock in ETH derivatives over Bitcoin futures.

The US multinational investment bank reportedly wrote a note to its customers this week informing them that, during September, Bitcoin futures on the Chicago Mercantile Exchange (CME) have been trading lower than the actual spot BTC price.

This is known as trading at a “discount”. And, since August, it’s apparently led to more and more large investors shifting, or at least diversifying, into Ethereum – the no.2 crypto by market cap.

JP Morgan’s analysts described the move as a “strong divergence in demand”, adding: “This is a setback for Bitcoin and a reflection of weak demand by institutional investors that tend to use regulated CME futures contracts to gain exposure to Bitcoin.”

When things are going well for Bitcoin futures investments, they tend to trade at a “premium” to actual Bitcoin.

According to Business Insider, which has been privy to the JP Morgan research, this happens due to “high Bitcoin storage costs and the juicy yields available for passive crypto investing pushing up futures prices”.

As for Ethereum, JP Morgan analysts cited CME data, noting that the 21-day average ETH futures premium rose to 1 per cent over Ether prices on the spot markets.

“This points to much healthier demand for Ethereum vs Bitcoin by institutional investors,” said the investment bank commentators.

Recently, Cathie Wood, the CEO of huge US investment firm Ark Invest, revealed that her firm’s confidence in Ethereum has risen dramatically.

Wood hinted that Ark Invest is looking to dilute its Bitcoin-dominant crypto exposure to include more Ethereum, with something more like a 60/40 BTC/ETH split.


Charts support macro bullishness for ETH

On a technical, charting level, Ethereum has generally been looking more solid than Bitcoin lately, too.

As Wellington-based crypto analyst and YouTuber Lark Davis points out in his latest video, ETH has been trading well above its 200-day moving average support line since July, even with its recent dips under US$3K.

Other analysts are bullish on Ethereum right now, too…

While the general Bitcoin forecast from both Lark and Van de Poppe is also pretty bullish for Q4 this year, the OG crypto has been lately struggling to reclaim its own critical 200-day MA support line, which currently sits at about US$45,700.

The 200-day moving average is regarded by some as a bull market/bear market line in the sand. Reclaiming it, and retesting it as support, is seen as a healthy market move.

At the time of writing, both Bitcoin and Ethereum, and indeed the entire market, is pulling back due to fresh (or perhaps stale and rehashed) announcements about China cracking down on crypto.

BTC is trading at US$42,644, while ETH is changing hands for US$2,899 (still about US$300 above its 200-day MA).