HOME CATEGORIES WRITE AND EARN 🔍
CATEGORIES WRITE AND EARN MORE

CRYPTO NEWS

Your favorite crypto news blog

CME Could Soon Launch Ethereum Futures and That’s Huge for ETH: Analyst

Altcoins 2020/05/09 18:45 by Nick Chong
Ever since the CME launched futures for Bitcoin, investors have been asking for Wall Street-centric Ethereum futures. The reason: cryptocurrency investors believe these derivatives will catalyze ETH buying by an institutional audience. Analyst Expects Ethereum Futures to Send Price Flying According to a prominent crypto trader, “it won’t be long before we see [Ethereum] futures launch [on the CME].” He attributed this sentiment to the belief that with the introduction of Proof of Stake via ETH 2.0, demand for Ethereum derivatives could increase, thereby catalyzing exchanges to respond by listing futures. Should this CME listing happen, the trader wrote, it will have a “huge impact” in pushing prices higher. There was not much more backing this analyst’s assertion other than his belief that ETH 2.0 will catalyze futures demand, but the Commodity Futures Trading Commission (CFTC) has indicated strong support for this idea. Speaking to Bloomberg earlier this year, chair of the CFTC, Heath Tarbert said that he expects Ethereum futures to come to U.S. markets in the near future: “Certainly, we’ve seen Bitcoin futures, both cash-settled as well as physically delivered. My guess is we’re going to see Ether futures as well, and as things start to migrate into the commodities space, we’ll see even more.” And late last year, at an event in Washington D.C., Tarbert said that he expected such derivatives to come to market within six to 12 months. Because ETH is technically a commodity in the eyes of regulators, it is the CFTC that regulates U.S. futures and derivatives of the cryptocurrency. There Is Likely Demand for Ethereum Futures There is seemingly institutional demand for Ethereum, adding to the case to be made that futures will soon come to market. Multi-trillion-dollar asset manager Fidelity Investments indicated late last year that responding to demand, it will try and implement Ethereum services in the near future. There’s also Grayscale Investments, a crypto fund that registered over $100 million worth of ETH purchases in Q1 of 2020, most of which came from institutional investors. With there being clear institutional demand for Ethereum and an approving CFTC, the only thing seemingly stopping a futures contract is the exchanges being hesitant to file for launch. Don’t Get Your Hopes Up While many are expecting for these vehicles to launch, not everyone is convinced Ethereum is ready. CoinDesk’s Director of Research, Noelle Acheson, wrote in an op-ed that it is highly unlikely that “we will see ether futures in significant volume on a regulated U.S. exchange any time soon. If ever.” Backing her scathing remark, Acheson looked to a confluence of factors. These include but aren’t limited to: The relative illiquidity of Ethereum compared to Bitcoin The uncertainty regarding the blockchain’s consensus mechanisms and potential contentious hard forks The DAO hack The proposed potentially security-like ability to stake ETH with a future update The simple fact that Ethereum wasn’t built to be an investment asset, she argued. ETH was promoted as “gas” for the internet of value. Her argument is that these characteristics of Ethereum make the cryptocurrency much more uncertain than Bitcoin. After all, while the CFTC may be approving of ETH, it’s the exchanges that take on much of the reputation risk when listing the product at the end of the day. Photo by Soroush Karimi on Unsplash

0 Like(s)



You should also read...

Crypto 21/11/19 09:28 by Martin Young
Singapore Central Bank Okays Crypto Derivatives Trading
Singapore has always been seen as a hub of digital finance. Many of the world’s major blockchain and crypto conferences are held there and a lot of the region’s exchanges have chosen the island na...
Read More
Altcoins 30/11/19 22:00 by Nick Chong
Crypto Tidbits: Bakkt’s Bitcoin Futures Surge, UpBit Hacked for $50 Million in Ethereum, US Arrests Blockchain Researcher
Another week, another round of Crypto Tidbits. Surprisingly, Bitcoin (BTC), saw some relatively strong performance over the past seven days, gaining 2% according to Coin360. This came after the leadi...
Read More
Crypto 02/12/19 14:40 by Kevin Helms
Regulatory Roundup: Germany to Let Banks Sell and Store Crypto, Laws Changing in Asia
Some major regulatory developments in the crypto space have transpired this week. Not only has Germany passed a bill allowing banks to sell and store cryptocurrencies, but South Korea and Thailand are...
Read More
Altcoins 20/03/20 13:36 by John Kiguru
Ethereum Looks To Trigger Altseason Again With A 25% Upsurge
In the late hours of Thursday, the crypto market began experiencing a surprising upsurge. After a long day of setting higher supports, the crypto market finally broke above. Ethereum has been recordi...
Read More
Crypto 05/06/20 12:20 by Guest Author
Why Collaboration Is Vital in the Cryptocurrency Space
The cryptocurrency industry is growing at a rapid pace, but there’s still a long way to go. With a market cap of around $275 billion, crypto is dwarfed by traditional assets like gold ($8 trilli...
Read More