Explore this week's key macro trend: the upcoming FOMC meeting, and how it could potentially impact crypto and traditional markets.

Following last year's dovish moves by the US Federal Reserve, which adjusted the target range to 4.25%–4.5%, a potential reduction in interest rates could stimulate the US economy and provide a much-needed boost to both cryptocurrencies and stocks. With the next Federal Open Market Committee (FOMC) meeting set for March 19, 2025, investors are watching closely for insights into policymakers' outlook and future plans.

In this article, Bybit explores this week's key macro trend: the upcoming FOMC meeting. But first, let's review 

Last week, key macroeconomic reports in the US included job openings, the Core Consumer Price Index (CPI) and the Core Producer Price Index (PPI).

 232,000 to 7.74 million, hires rose 19,000 to nearly 5.4 million and layoffs declined (for a fourth straight month) to 34,000. Additionally, a revised December 2024 reading showed 7.508 million vacancies, down from the originally reported 7.6 million.

With job openings exceeding forecasts of 7.63 million, the labor market remains resilient despite the Federal Reserve's restrictive monetary policy.

In February, the CPI for core (and all) items 

, slightly below the expected 0.3% increase. On an annual basis, headline inflation reached 2.8% and core inflation hit 3.1%, both 0.1% lower than analysts' forecasts.

This softer-than-expected inflation suggests that price pressures are gradually easing, potentially strengthening the case for a Fed rate cut later this year. However, trade policy uncertainty and tariffs remain key risks.

The PPI, a key measure of pipeline inflation pressures, 

 in February 2025 after jumping 0.6% in January. This was well below the 0.3% increase expected by analysts, suggesting easing cost pressures on producers.

The unexpected 0.1% decline in core PPI (excluding food and energy) further supports this trend, potentially giving the Fed more flexibility in future rate decisions.

Macro events' impact on crypto and equity markets

Following an 8.3% drop on Mar 10, 2025 after the US job openings report, the combined crypto market cap recovered all losses by March 16, closing the week at $2.75 trillion. Bitcoin followed the same trend, gaining 2.35% over seven days, while Ethereum and Solana posted a 7.24% loss and a 2.18% gain, respectively.

Equity and crypto markets moved in the same direction last week. After a sharp decline on March 10, all three major US stock indices — the S&P 500 (SPX), Nasdaq-100 (NDX) and Dow Jones Industrial Average (DJI) — entered a recovery. However, equity markets closed the week lower, with the SPX, NDX and DJI losing 2.29%, 2.46% and 3.09%, respectively.

FOMC Meeting on Mar 19, 2025: What are investors watching for?

The Federal Open Market Committee (FOMC) is widely expected to hold interest rates steady at its meeting on Mar 19, 2025. According to the 

, there’s just a 1% probability of a rate cut, with a 99% chance that the federal funds rate remains at 4.25%–4.5%. 

Fed Chair Jerome Powell has emphasized that inflation remains 

, while the labor market continues to show strength. Given these conditions, policymakers are expected to maintain a cautious stance, waiting for more economic data before adjusting policy.

Although a March rate cut is highly unlikely, investors will focus on signals regarding future policy moves, particularly for the upcoming May and June meetings. The FOMC is set to release updated economic projections, including forecasts for inflation, GDP growth and employment. If these forecasts weaken, the chances of a May rate cut could rise. Powell's press conference will be closely watched for clues about the Fed's timing for potential rate cuts.

While March rate cuts seem to be off the table, a Fed rate cut by June remains a possibility. Based on FedWatch data, there’s an 18% probability of a rate cut in May and a 68.5% chance in June. If the Fed cuts rates in June, there’s a 57.3% probability it will lower the target range to 4.0%–4.25% and an 11.2% chance it will drop to 3.75%–4.0%.

Beyond the immediate rate decision, changes in the Fed's tone will be key. If the Fed expresses less confidence in economic strength, or highlights growing risks from tariffs and fiscal tightening, it could signal a shift toward a more dovish stance. The bond market's reaction will also be crucial, as any shift in the Fed's tone could impact Treasury yields, equities and risk sentiment.

Will Powell pause or slow quantitative tightening (QT)?

Quantitative tightening (QT) is the Fed's process of shrinking its balance sheet by allowing bonds to mature without reinvesting the proceeds. This effectively removes liquidity from financial markets, making borrowing more expensive, and slowing economic activity. The Fed 

 in June 2022 as part of its strategy to combat inflation, complementing interest rate hikes by draining excess liquidity from markets.

 adding uncertainty, some FOMC officials are now considering pausing or slowing QT to prevent liquidity shortages. The Fed has already 

 from financial markets, and continued reductions could strain bank reserves and money markets. If QT persists at its current pace, liquidity risks may emerge as the Treasury refills its Treasury General Account (TGA). A sudden loss of liquidity could disrupt short-term lending markets, forcing the Fed to intervene before financial conditions deteriorate.

Market sentiment is shifting, with Polymarket bettors assigning a 

 of QT ending before May. If Powell signals a slowdown, stocks and cryptocurrencies could benefit from increased liquidity. However, the Fed remains cautious, as an early halt to QT could weaken its inflation-fighting efforts.

March 19 FOMC: A key macro event for financial markets

The Federal Reserve's upcoming March 19 FOMC meeting is a critical event for investors, with markets widely expecting no rate cut, as inflation remains above target and the labor market remains strong.

Meanwhile, last week's economic data showed resilient job openings, softer-than-expected inflation and flat producer prices, signaling a mixed outlook for monetary policy. Additionally, speculation is rising that the Fed may pause or slow quantitative tightening due to debt ceiling concerns. This shift would increase liquidity, potentially boosting risk assets, such as crypto and equities.

Did you know that you can gain exposure to gold, forex and other financial markets via 

? After setting up an MT5 account, you can trade over 100 pairs with up to 500x leverage in one unified interface featuring tight spreads, top-tier liquidity and tailored fees. Ready to start trading? 

Intermediate

macro.png

Macro this week: What to expect from the March 19 FOMC meeting

Onchain Labs, in collaboration with The Arbitrum Foundation, is launching a program to accelerate onchain application development on Arbitrum.

Daily top performer — EOS Network (EOS)

The S&P 500 fell 1.07% as tech stocks declined, with Tesla down 5.3%. Investors await the Fed’s policy decision amid trade tensions and recession concerns. Gold hit a record $3,030 as tariffs, Middle East tensions, and Fed rate cut bets drive demand. Markets await the Fed’s policy decision. The Coindesk Indices, which tracks the broader crypto market, fell by 0.41%, with Bitcoin and Ether down by 2.61% and 1.57% in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is EOS, up 30.9% after EOS Network unveils Vaulta, a Web3 banking platform bridging crypto and traditional finance.

EOS Network (EOS), launched in 2018, is a fast, cost-effective blockchain for DApps, using Delegated Proof-of-Stake and EOS tokens for governance. It features rapid transactions, flexible smart contracts, and developer-friendly tools for seamless upgrades and execution. EOS Network introduces 

, a Web3 banking platform bridging digital assets and traditional finance. Launching in May 2025, it will support asset tokenization and DeFi solutions, guided by a Banking Advisory Council for compliance and adoption.

Check out the latest prices, charts, and data of 

 with The Arbitrum Foundation, is launching a program to accelerate onchain application development on Arbitrum. As the original builders of Arbitrum, Offchain Labs brings deep technical expertise and user insights to support developers in creating innovative applications. The initiative will provide product and go-to-market support while ensuring fair and equitable project launches. With Arbitrum’s advanced technology and strong developer ecosystem, Onchain Labs aims to drive the next wave of industry-leading applications, with its first project set to debut soon.

Yesterday, BTC spot ETFs saw $9.0 million in outflows, all from non-GBTC funds.

 lets users earn airdrop rewards by buying and staking lvlUSD, a stablecoin backed by USDT and USDC. Providing liquidity to the lvlUSD/USDC pool on Curve boosts XP earnings up to 40x. The program also grants eligibility for the Symbiotic airdrop, offering two rewards in one.

Beginner

1.png

Onchain Labs launches program to accelerate Arbitrum app development

Eclipse merges Ethereum & Solana, using Solana’s SVM for high scalability. With modular design & ZK proofs, it offers fast, low-cost transactions.

 (ETH) network has revolutionized the way we look at blockchain technology. Unfortunately, Ethereum has also suffered from performance issues, due to network congestion and its suboptimal scalability setup. Two approaches to dealing with the blockchain's performance weaknesses took off around 2020 and 2021 — one was active work on alternative blockchain networks that would deliver better scalability and throughput capacity and, in parallel with it, research and development on Ethereum-linked 

The first approach led to the introduction of several high-performance networks, among which 

 (SOL) has stood out, thanks to its excellent throughput capacity of up to 65,000 

 (TPS). In turn, the work on Layer 2 solutions resulted in numerous rollup networks, with 

 (OP) probably the most dominant of these as of 2025. Both Solana and the leading rollups servicing Ethereum feature much lower transaction fees and higher processing capacity compared to Ethereum, the world's premier smart contract chain.

However, Solana isn't directly compatible with Ethereum to leverage the latter's vast ecosystem, while the existing rollups come with their own share of drawbacks — poor compatibility with non-Ethereum environments, inefficient data availability (DA) layers, inflexible validation of cryptographic proofs that accompany transaction data and the lack of parallelized processing.

Eclipse is an Ethereum Layer 2 network that utilizes the Solana Virtual Machine (SVM) to offer a platform compatible with both Solana and Ethereum. Its SVM-powered engine, 

 (TIA)–based DA layer and selective use of 

 (ZK) proofs allow Eclipse to achieve stellar performance characteristics and address the main drawbacks of existing Layer 2 rollups.

 is an Ethereum Layer 2 solution that uses Solana's SVM as its processing engine to achieve greater scalability and throughput capabilities than existing Layer 2 rollups. 

The network also leverages a modular design, outsourcing its data availability (DA) layer to Celestia. Furthermore, Eclipse employs ZK proofs in an otherwise optimistic validation environment to streamline transaction processing in cases where the standard optimistic fraud proofs are challenged. 

All of these properties allow Eclipse to achieve unparalleled performance characteristics by the standards of the Ethereum ecosystem. The platform boasts transaction fees of just $0.0002, and can theoretically scale up to 65,000 TPS, the upper limit of the SVM.

Eclipse’s network has implemented the Hyperlane cross-chain protocol, allowing it to communicate directly with the ecosystems of Solana and Ethereum. As such, it's the first Ethereum-linked rollup that features direct compatibility with the Solana chain. This allows Eclipse to potentially unify the DApp ecosystems of the two major blockchains.

The Eclipse testnet was unveiled in early 2024, and its 

 was launched in November 2024 and operates without a native token of its own, instead using ETH for transaction fees and other operations. Based in San Francisco, California, Eclipse was founded in 2022 by entrepreneur/angel investor Sam Thapaliya and blockchain developer Neel Somani. The project boasts an impressive list of institutional and individual investors that includes Polychain Capital and Anatoly Yakovenko, co-founder of Solana.

What is the Solana Virtual Machine (SVM)?

Eclipse's execution engine is based on Solana's SVM, which features several properties that make it more scalable and adaptable to heavy loads than Ethereum's native virtual machine, the 

. The SVM can handle up to 65,000 TPS, while the realistic throughput observed on Ethereum at its 

There’s been much discussion in the industry about the EVM scaling up to hundreds of thousands of TPS, but these improvements have yet to materialize, and are mostly dependent on utilizing Layer 2 rollups linked to the main chain. A key factor contributing to the SVM's superior throughput capacity is its ability to process multiple transactions in parallel. Unlike the SVM, the EVM engine doesn't support parallelized processing.

Another feature of Eclipse’s SVM is the ability to support programming languages commonly used in the Solana ecosystem — Rust and C. Compared to Solidity, the primary programming language used in EVM environments, Rust and C offer certain advantages in terms of both performance and security.

Like other Layer 2 platforms, Eclipse uses the Ethereum Layer 1 network for transaction settlement. This is where the finality and validity of transactions processed on Layer 2 are confirmed. The use of Layer 1 ensures that Eclipse takes advantage of Ethereum’s well-regarded security.

For end-users, a relevant detail of Eclipse’s settlement is the absence of any platform-specific token to pay for gas. Eclipse utilizes Ether (ETH) as its gas fee currency, and there are plans to introduce a gas fee abstraction mechanism that will let users pay transaction fees in other cryptocurrencies as well, e.g., in the 

Eclipse's execution layer is handled by its SVM. The platform uses a validating bridge to maintain a connection to Ethereum Layer 1, where the final transaction settlement occurs. We noted above that one key reason for Eclipse’s stellar throughput capacity is its SVM, which is capable of parallelized processing. 

Another essential aspect of its execution engine, also supported to a large extent by the parallelized processing, is the ability to smooth out transaction fees on the network via local fee markets, a blockchain mechanism that regulates platform-wide gas fees. Execution engines such as EVM are based on a global fee market system. On EVM-based chains, high demand from one app (e.g., 

) can drastically raise transaction fees for everyone. Eclipse’s SVM solves this problem by using local fee markets — instead of increasing fees across the entire network, only transactions related to the high-demand app are affected.

The DA layer is a critical part of any Layer 2 platform. It ensures that the data needed to verify transactions and execute smart contracts is publicly accessible and available for Layer 1 validators to check. Consistent with its principle of modular blockchain architecture, Eclipse outsources its DA layer to Celestia, a blockchain platform that leases its high-performance DA layer to Layer 2 networks.

In general, the Eclipse chain operates as an optimistic rollup. However, at the same time, the platform uses ZK proofs via the 

 verification provider in cases where validators on Ethereum Layer 1 challenge the standard optimistic fraud proofs. The presentation of ZK validity proofs upon these challenges significantly speeds up the verification process. This combination of optimistic fraud proofs (known for being less computationally intensive than ZK proofs) and ZK proofs during validity disputes ensures that Eclipse can efficiently validate transactions.

 to facilitate the transfer of funds between the Eclipse, Ethereum and Solana blockchains. The platform's native bridge, the 

, is primarily designed for the transfer of assets between Ethereum and Eclipse. Meanwhile, the 

 is the main bridging solution for moving crypto funds between Eclipse, Ethereum and Solana.

Additionally, several other bridges service the Eclipse ecosystem. Some of them focus on transfers between Eclipse and Ethereum, but some can also access other blockchain environments. For instance, the Retro Bridge allows you to move assets between Eclipse and a variety of blockchain platforms, including 

There's also the Hyperlane-powered Stride Bridge, which lets Eclipse users access blockchain ecosystems beyond the major ones. Using the Stride Bridge, Eclipse users can move funds from Celestia and 

 (STRD). The bridge also lists support for network transfers from the Forma blockchain and Ethereum. However, as of the time of this writing on Mar 17, 2025, transfers from these two chains to Eclipse aren’t yet supported.

 is a unified restaking token (URT) launched by Eclipse in partnership with the Nucleus yield generation services provider. It allows users to earn rewards from multiple Ethereum yield-generating protocols. By minting tETH through deposits of eligible 

 tokens (LRTs), users can benefit from diversified risk and reward exposure, with periodic yield increases and the option for redemption at full value on Ethereum or Eclipse.

 (WETH), ether.fi’s weETH, Renzo Protocol’s ezETH, Swell Network’s rswETH, Dinero’s apxETH and Puffer Finance’s pufETH.

 is an Eclipse community-driven game in which users grow "grass" by tapping or bridging assets to Eclipse. By completing app-based boosts, users can increase their grass growth rate. The goal is to feed Turbo, an ever-hungry cow, by maximizing grass growth through bridging various assets like ETH, SOL, TIA and popular 

 USDT and USDC. Solana-based tokens, such as ezSOL, JitoSOL and kySOL, can also be used to grow grass within the game.

, you need to complete a series of tasks — follow Eclipse on X, visit Eclipse’s website, explore its app ecosystem and swap $10 worth of crypto via Umbra, a privacy-focused Ethereum payment protocol. This campaign is valid until Mar 28, 2025, 7AM UTC.

The Eclipse team has come up with something unique within the wider EVM ecosystem: the ability to use Solana's high-performance execution engine adapted for Ethereum, the SVM. It offers numerous advantages over the EVM, including executing transactions in parallel and leveraging local fee markets. At the same time, while the SVM forms the backbone of transaction processing on the chain, Eclipse aims to remain within its general rollup-centric road map, operating primarily as an Ethereum rollup network. 

Besides integrating the SVM into its largely Ethereum-focused platform, Eclipse leverages modular architecture principles, outsourcing its DA layer to Celestia, one of the leading providers of DA services in the 

 industry. All of these architectural choices have resulted in a Layer 2 chain that clearly stands out for its performance in the competitive world of Ethereum rollup solutions.

eclipse crypto.png

Eclipse: The perfect fusion of Ethereum and Solana

Elixir (ELX) is a blockchain platform bridging institutional RWAs to DeFi, offering yield opportunities and liquidity support for decentralized exchanges.

 (RWAs) are one of the hottest topics in 

 setting still comes with its own share of issues. First, asset owners such as investment funds don't have a wide choice of alternatives for securely tokenizing their assets in a compliant way. Secondly, there's a lack of sufficient avenues for the active use of RWAs within DeFi protocols after the assets have been tokenized and brought on-chain.

As a result, many institutional asset owners are still hesitant to use their funds within a blockchain environment. Those brave enough to adopt RWAs by tokenizing their assets on-chain face the reality of limited choices for deriving healthy returns from their investment. 

Due to these factors, RWAs — despite having great promise as a bridge between traditional and web3 finance — are still underutilized within DeFi.

Elixir is a modular blockchain and DeFi-focused platform that aims to make it easy for institutional investors to utilize their RWAs in yield-bearing products on-chain. The platform also acts as a 

, decentralized USD (deUSD), plays a key role in enabling active RWA use for yield and liquidity provision to partner DEXs.

 (ELX) is a blockchain network that facilitates institutional investors' use of RWAs in the DeFi ecosystem and provides liquidity support to DEXs. 

The project features a synthetic stablecoin, deUSD, that’s backed by collateral made up of two crypto assets — USDS and 

 (SKY), formerly known as MakerDAO (MKR), while stETH is a tokenized version of staked Ether (ETH) provided by the 

Elixir enables institutional holders of tokenized RWAs, such as those issued by Securitize and other RWA service providers, to mint deUSD and use it in DeFi while still earning yields from their underlying assets.

Elixir also helps other DEXs by enabling its users to supply liquidity to order book–based exchanges easily. This reduces DEXs' reliance on centralized market makers and allows them to access additional liquidity. Users who provide liquidity earn subsidized APYs, which are either incentivized by Elixir or the DEXs themselves. As of early 2025, Elixir has already been integrated by more than 30 DEX platforms.

The Elixir project was founded in 2022 by Philip Forte and Christopher Gilbert. Its chain launched the first phase of its mainnet operations in October 2024 and held a token generation event (TGE) for its native cryptocurrency, ELX, on Mar 7, 2025.

 (DPoS) consensus model. The project’s documentation states that its network features a highly modular design and high throughput capacity.

To synchronize its work with other DEXs, the network uses exchange feeds, which pull live trading data from these DEXs and send it to Elixir's data aggregators. An aggregator node is then responsible for creating an encrypted database from these feeds and passing it to the chain’s validator and auditor nodes. Then, relay nodes execute trades on DEXs using their API keys, collect order proposals from validators and send them for auditing before final execution.

Elixir's validators secure the network using a DPoS consensus model, whereby users can delegate their funds to a preferred full validator node. The network requires a 66% consensus among its active validator nodes in order to approve transaction blocks.

A validator node needs to have at least 9,000 ELX 

 or delegated to it to earn block rewards. As such, it's important for users to choose a reasonably popular validator in order to ensure they can earn rewards from their delegated funds. For instance, as of the time of this writing (Mar 17, 2025), fewer than 30 Elixir validators have enough funds staked with them to generate rewards.

We noted above that relay nodes send order data for executing transactions on other DEXs for further auditing before the actual execution occurs. Auditors are the 

 responsible for verifying this data before the orders can be placed. In addition to the order data sent by relay nodes, auditors also use the encrypted exchange feed data sent by aggregators.

Auditors use these two critical data sources — the encrypted exchange feed data from aggregators and the order data from relay nodes — to verify and approve the orders for final execution on the participating DEXs.

 that ensures the smooth operation of several key network activities: staking, reward distributions to validators and financial penalties to misbehaving validators, known as slashing.

In the case of disputes or inconsistencies in the network data, the controller and auditors resolve these together, acting as a dispute resolution layer.

deUSD is a synthetic stablecoin introduced by Elixir. Subject to approval via a governance vote, the token will be used for staking, allowing users to earn rewards from protocol fees. The staked version of deUSD, sdeUSD, is an asset that’s used to accrue yields from rewards generated both on Elixir and via its partner DeFi platforms.

Importantly, deUSD is also used to provide liquidity in the form of collateral to participating DEXs. The deUSD stablecoin enables users in the institutional domain, specifically RWA holders, to obtain a sufficiently liquid asset to participate in the wider DeFi ecosystem. According to the project’s documentation, more than ten leading institutional finance organizations have already adopted deUSD for their assets.

deUSD differs from many other stablecoins in that it isn’t collateralized by US dollar reserves. The token’s collateral is made up of Lido’s stETH and Sky Protocol’s USDS. To ensure its stability, deUSD is subject to an 

 adjusting overcollateralization mechanism, the 

When funding rates become negative, the OCF shifts more of deUSD’s collateral into USDS. If the OCF’s value drops too much, it automatically converts its assets into USDS to ensure deUSD’s backing remains intact. Meanwhile, when funding rates become positive, funding rate exposure — that is, the potential gains and costs from holding leveraged positions in 

 contracts — is used to generate additional returns.

During the project’s earlier period of operations, 

 (CEXs) are expected to provide the bulk of liquidity for deUSD and facilitate the token’s minting and redemption. Eventually, the protocol plans to shift more of the backing and liquidity management to decentralized platforms. The minting/redeeming process will be supported by authorized market makers, who will use stETH collateral and engage in basis trading to manage risk.

The Elixir protocol's native token, ELX, is primarily used for governance, staking and stake delegation. Certain rewards, such as 

, can also be distributed in ELX. The token’s total and maximum supply is 1 billion.

The ELX token is available on Bybit’s Spot market as a 

. You can also take advantage of Bybit’s campaign dedicated to the token to grab a share of the 

Under the terms of the campaign, new users can earn ELX rewards by accumulating a deposit volume of at least 200 ELX, or by depositing at least 100 USDT and trading 100 USDT worth of ELX via their first trade. Existing users can also qualify for rewards by trading at least 500 USDT worth of ELX on the Spot market. The campaign is valid till Mar 24, 2025, 9AM UTC.

Bybit also offers two additional ELX airdrop campaigns to its users. One of these is the 

 event. In order to receive your share of the airdrop, just follow these three steps: 

The airdrop is valid till Mar 31, 2025, 10AM UTC.

. Win a share of the 40,000 ELX prize pool by registering for the event, completing specified tasks to earn Lucky Draw tickets and spinning the wheel by using your tickets. You can register for the event until Mar 20, 2025, 12AM UTC, and the Lucky Spin period ends exactly 24 hours after this date.

Additionally, Elixir runs its own reward campaign, 

, that lets you earn Potions, points that help you build power across the platform’s network of participating DEXs. However, note that participation in the Apothecary campaign doesn't guarantee an airdrop of ELX tokens.

Elixir is a relatively new entrant in the DeFi space. The project launched the first phase of its mainnet in October 2024, with the main launch in March 2025. Elixir’s platform aims to address the issue of inflexibility of RWA use 

. The project aims to focus its efforts on larger institutional players, including leading investment funds.

At the same time, while Elixir pursues the ambitious goal of attracting the big players of the financial world via its RWA stream, its second key specialization — liquidity support to DEXs — should provide enough quick wins within the shorter term. With more than 30 DEXs already in Elixir’s ecosystem, it looks like this specialization is already paying dividends. The question now is: Will the push for the top brass of the institutional finance world enjoy similar success? 

elixir crypto.png

Elixir (ELX): The institutional bridge to DeFi liquidity

Options

ETH options allows you to own ETH without having to buy the asset itself.  Find out how you can trade this crypto option.

Global interest in cryptocurrency, whether

, has soared over the past few years. Crypto is currently a hot topic of conversation on various social media platforms, including TikTok, Twitter and YouTube. Statistics show that

 have dabbled in cryptocurrencies. The global cryptocurrency market cap 

, and it isn't just the assets that are gaining popularity.

At present, a number of crypto derivatives and futures are available for trading in the crypto markets.

 are a kind of derivative — a financial instrument that can be used to hedge or research and speculate on an asset's value.

More specifically, a crypto option provides the buyer the right (without any obligation) to purchase or sell the underlying cryptocurrency for a set price at (or before) a fixed expiration date. The right to buy the underlying cryptocurrency is referred to as a “call” while the right to sell is called a “put.”

In 2013, Vitalik Buterin, the co-founder of Ethereum, released a white paper detailing the blockchain's operations, including its mechanics, applications and potential areas for concern. Two years later, Buterin and Joe Lubin, the founder of blockchain software startup

, jointly launched the Ethereum platform.

Ethereum's founders aimed to build an electronic, programmable network with use cases beyond enabling the safe trade of virtual currency. In 2016, a group of Ethereum network participants obtained majority control of its blockchain. In June of that year, a hacker took the opportunity to 

To restore the stolen funds, Ethereum members voted on a 

 was born. A small proportion of the community, however, decided to remain on the original Ethereum blockchain.

Since its launch, Ethereum has climbed to the #2 spot of CoinMarketCap’s cryptocurrency rankings, and has managed to retain its position ever since. As of June 22, 2022, it has a

You can now trade ETH options from various crypto exchanges. Crypto options such as ETH options are popular because they allow plenty of room for leverage. Instead of paying $1,150 to buy 1 ETH, you can spend a much lower amount of money on ETH options, and technically own a larger amount of Ethereum by doing so.

Broadly, ETH options can be classified into two categories: Call options (bullish bets) and put options (bearish). While call options are used to buy assets, put options are used to sell assets.

 A type of option that allows the trader to only exercise the contract at the time of its expiration.

With American options, buyers can exercise their contracts at any time before they expire. Because American alternatives provide more flexibility, they’re usually more expensive than European or Bermuda-style options.

 A restricted type of American option, Bermuda has two deadlines on which the options might be exercised — the expiration date, and specific dates before expiry.

Cryptocurrency traders can buy options for exposure to capital appreciation, or they can sell them to earn a premium. Both put and call options can be purchased and sold. It's important to note, however, that neither choice is risk-free.

 network — a decentralized, distributed public ledger that verifies and records all transactions. In blockchain transactions, cryptography is employed to keep the network secure and validate transactions.

With the help of computers, users can "mine" ETH by solving complex algebraic calculations. In this way, validated transactions are executed on the blockchain network and add new blocks. Traders are given cryptocurrency tokens as a reward, and these tokens in the Ethereum platforms are termed Ether, or ETH.

The Ethereum network may be used to store data and run decentralized apps (

). Users can even host software on the Ethereum blockchain.

 is an agreement that grants its holder authority (without obligation) to purchase and sell an asset on an agreed-upon date at a set price.

 provides holders with the right to buy a specific amount of Ether on a specific date, at a predetermined price.

 provides holders with the right to sell a specific amount of Ether on a particular date, at a specific price.

The main factors that determine an option’s price are:

The price of a call option increases with an increase in the price of the underlying asset. Conversely, the price of a put option decreases with an increase in the price of the underlying asset.

The principal trading venues for buying ETH options are centralized exchanges, such as FTX or KuCoin. Some exchanges settle crypto options contracts in cash, whereas others physically distribute crypto assets to investors after a trade is completed. Factors such as platform costs, asset liquidity and personal trading strategy should be assessed before choosing a venue for trading.

Recently, noncustodial options trading systems on Ethereum have been gaining traction. While not very liquid

 options platforms are compatible with Ethereum's 

 (DeFi) stack. The majority of permissionless options trading systems are modeled after standard options protocols.

Crypto options can serve as an affordable, low-risk alternative to perpetual swaps or futures. Like other derivatives, options contracts allow traders to bet on the future price of an underlying asset. They can be settled in cash (U.S. dollars) or cryptocurrencies (Bitcoin, Ether, etc.).

The target price of each option is known as the “strike price,” which determines whether an option can be exercised. The value of an option is dependent on the difference in price between the strike price and that of the underlying asset.

The strike price of call options is the price at which the option holder can purchase the assets. On the other hand, the strike price of put options is the price at which the assets can be sold. Strike prices are standardized, which means they are set in predetermined monetary amounts.

The “expiration date” for an Ethereum option means the deadline for exercising option contracts. An option expiring "in the money" provides the owner of the option the choice to exercise it, or to close the position to collect the profit. If an option is "out of the money" on the day it expires, it loses all value. If you don't intend to exercise your option, you can exit your contract before it expires and either profit or lose money.

This occurs when the strike cost of an option is more favorable than the market price of the underlying asset. An in-the-money (ITM) call option relates to the ability of the option holder to purchase an asset at a cost lower than the market rate. With an ITM put option, the option holder can sell the asset at a price higher than the current market price.

The strike price of an out-of-the-money (OTM) 

 option is greater than the market worth of the underlying asset, while an OTM 

 option has a strike rate that is lower than the underlying asset's market rate.

Traders can still benefit from buying OTM. One possible scenario is that they’ve purchased a less expensive OTM option, but that option is now getting closer to becoming ITM. As such, even though the option is currently OTM, it may become worth more than the trader paid for it.

In this case, the price of the underlying asset is equal to the strike price of the option.

Many factors come into play when determining the value of Ether or ETH options. Pricing is influenced by several variables, all of which should be taken into consideration before you enter a contract.

ETH options allow users to hedge against risk and improve market equilibrium by providing opportunities for 

. They’re cost-effective since they don’t demand an upfront charge when issuing a contract. Another advantage is that you don't have to exercise the contract if you don't want to — you can choose to opt out of the contract. Options also boost the liquidity of the market.

The market for ETH options is quite volatile. As with other asset classes, traders have a better chance of making a profit if the market moves in their favor.

For buyers, the key advantage of making informed options investment decisions is that they’re under no obligation to exercise a contract if they don’t want to. Crypto options carry a risk that’s limited to the premium paid. If the market goes against an options buyer, the resulting exposure won’t lose more than their initial investment.

If you're looking to diversify your portfolio with options, ETH options may be a good entry point. Alternatively, you can trade another type of crypto option,

ETH Options: How to Own Ethereum Without Actually Buying It

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards