CBOE: Ethereum futures coming soon but it is a challenge
In less than a year after Bitcoin initially introduced its futures contract, Ethereum is going to be the second cryptocurrency traded on regulated futures exchanges.
The Chicago Board Options Exchange (CBOE) launched Bitcoin futures in December 2017, and waiting for Commodity Futures Trading Commission (CFTC) to permit Ethereum futures in the end of 2018.
Bitcoin and Ethereum are a more liquid and encrypted cryptocurrency. On June, the US Securities and Exchange Commission (SEC) officially announced that Ethereum is not categorize to securities, which seems to pave the pathway for the Ethereum futures. CBOE has been considering this issue since the first bitcoin futures launched. They have discussed this in detail with the Commodity Futures Trading Commission. At the time, CBOE President Chris welcomed the SEC’s decision. He said that since the end of 2017, it has been a hot affair since to launch Ethereum futures contracts and they are very pleased that the SEC has cleared a critical obstacle for Ethereum futures. They have discussed this in detail with the Commodity Futures Trading Commission.
The market indeed has a lot of demand for Ethereum futures. After Bitcoin futures successfully launched, CBOE plans to adopt the same designation and structure to apply on any other forthcoming cryptocurrency futures. Thus what happens if launching Ethereum futures? Although the details of Ethereum futures have yet to be revealed, the Ethereum market has already been impacted.
Ethereum price rebounded from a small decline on August 31, which can be attributed to these initial reports. The price of Bitcoin also showed a similar pattern of volatility, with a strong rise on the same day.
It is not easy to predict the trend of any market, especially for cryptocurrency. However, big moves like major financial institutions seem able to affect the marketplace. The co-founder of Fundstrat, Thomas Lee has said that Ethereum futures will have a negative impact on the price of cryptocurrencies.
While, a well-known senior market analyst Mati Greenspan recently believes that the market of Ethereum futures is going to be optimistic as when Wall Street attempts to bridge with the cryptocurrency market, and he said that to launch Ethereum futures was the next significant step.
Although some people believed on social media that excessive short selling would damage the Ethereum value, Greenspan debates that short-selling is a key component of cryptocurrency price and helps the market development. In addition, he believes that the Ethereum futures will brings investors’ attention to cryptocurrency market, which is likely to attract new investors with great financial wealth, thus creating a chain effect on the entire marketplace.
Greenspan is very optimistic about Ethereum futures trading, whereas some people have put forward cautions on this. For example, in the past year, the Bitcoin futures market clearly has two modes — manipulation and large market operation. Some investors have made considerable interests, while some have lost. This phenomenon is very similar to the foreign currency exchange market 30 years ago. Both long and short positions that could easily influence the direction of the market.
The fear of Ethereum futures is reasonable. The market capitalization of Ethereum is much smaller than Bitcoin market. Ethereum futures may fall below $150 or even $100. Meanwhile, 95% of IC0s are raised with ERC-20 tokens. What if an IC0 raises 20 million US dollars and have Ethereum on hold? Possibly the funds becomes halved, eventually result a sudden collapse of other tokens and issuers based on Ethereum network, latterly a chain of devastating effects.
Although Bitcoin has firstly disclosed the gate to the market of cryptocurrency futures. However, that is difficult to learn the lesson and to conduct a conclusion in less than a year. Soon after the Chicago Board of Trade Exchange (CBOE) and the Chicago Mercantile Exchange (CME) respectively launched futures products, Bitcoin price reached the highest peak over than $20,000.
According to the published data, the average daily trading volume of Bitcoin futures has increased by 93% in the first quarter of 2018, and continuously been growing in the middle of 2018. Undoubtedly the demand of cryptocurrency futures is raising. In the next a few months, the launch of Ethereum futures will be noticed around world. But again, predicting the price of a cryptocurrency is blindness.
All data for market analysis collected from Citicoins.com
