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Over the past week, Ethereum’s derivatives market has seen a significant surge, with Singapore’s QCP Capital suggesting that this is the strongest indication yet of an impending altcoin season. In a client update on Monday, the firm reported that the total perpetual open interest (OI) in ether futures skyrocketed from “below $18 billion to over $28 billion within a week,” propelling the composite “altcoin-season index” past the crucial 50-point mark for the first time since last December.
Ethereum Leads the Charge as Altcoin Season Kicks Off
As expected, retail investors are following the trend, but it’s evident that this cycle’s momentum is being driven by institutions, influenced by evolving narratives and structural shifts, according to QCP. They highlighted the notable size of recent block trades on platforms like CME and Binance.
QCP identified the signing of the GENIUS Act last Friday as a critical catalyst for the shift. This legislation establishes a comprehensive federal framework for dollar-backed stablecoins, mandating that issuers maintain 100% short-term Treasury or cash reserves and comply with the Bank Secrecy Act. The White House described the act as “historic legislation that will position the United States at the forefront of the global digital currency revolution.”
With regulatory clarity now available, corporate treasuries are keen to increase their holdings, QCP notes. They view ether and smart-contract platforms like Solana, XRP Ledger, and Cardano as the foundational infrastructure poised to benefit from a surge in stablecoin issuance. The strategy is likened to the hard-money approach adopted by prominent bitcoin supporters such as MicroStrategy and Japan’s Metaplanet.
The note suggests that this policy shift is already influencing capital movements. On July 17, spot ether ETFs attracted $602 million, surpassing bitcoin ETFs’ $522 million, marking the first time in 18 months that ETH led in daily flows in US crypto ETPs. BlackRock’s iShares Ethereum Trust saw the largest subscription, and QCP believes its amendment to permit on-chain staking will likely receive SEC approval later this year. Analysts agree, anticipating a ruling on staking amendments by year-end despite BlackRock’s delayed submission.
Derivatives activity reflects the enthusiasm in the spot market. QCP observes “strong” interest in out-of-the-money call spreads like the ETH-26 Sep 25 $3,400/3,800 and ETH-26 Dec 25 $3,500/4,500 structures, along with consistent demand for call-side risk reversals across all listed tenors. Implied volatility skews now heavily favor calls, reminiscent of the April 2024 meme-coin craze, indicating traders’ readiness to invest in upside potential through the fourth quarter—just as ETF staking approval may be confirmed.
Ethereum’s growth has reduced bitcoin’s market dominance by four percentage points, lowering BTC’s share to 60% while boosting ETH’s from 9.7% to 11.6%, according to QCP. If this trend continues—and the firm emphasizes that sustained options market activity is crucial—”the next phase of altcoin season could already be underway.”
Currently, QCP is tracking three indicators: perpetual OI growth, the altcoin-season index, and relative ETF flows. A significant rise in bitcoin above $121,000 might delay the shift, they acknowledge, but the structural changes introduced by the GENIUS Act and the potential for yield-generating ether ETFs offer institutions a compelling reason to diversify. As QCP states, “We’ll be closely monitoring these signals—and if anything further confirms the hypothesis, you’ll be the first to know.”
At the time of writing, ETH was priced at $3,846.
