Ether’s leverage ratio has hit a record high of 0.57, more than double Bitcoin’s current ratio of 0.269. This surge in leverage indicates that traders are increasingly using borrowed funds to amplify their market positions. The ratio, which measures the degree of leverage employed by traders, has climbed from 0.37 at the start of Q4 2024. Ether’s leverage ratio is calculated by dividing the cumulative open interest in futures contracts by the total number of ETH in wallets tied to exchanges offering futures trading. This high leverage ratio suggests a significant amount of speculative trading in the futures market relative to the actual coins available. Leverage allows traders to control larger positions with less capital, magnifying both potential profits and losses. This dynamic often leads to increased market volatility.
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