2018 brought about prices of Ethereum (ETH) to an all-time high. It is now the second largest cryptocurrency in terms of market capitalisation. Such a spike in the prices of ETH created a lot of hype in the markets. The launch of Bitcoin futures on the CBOE (Chicago Board Options Exchange) prompted this spike in Ethereum price as well. It was a signal to other cryptocurrencies that they can also be accepted into the derivatives markets. They could also be treated as assets!
Now that Bitcoin has entered the derivatives markets, all eyes are on Ethereum to take that step. The most natural next move is for Ethereum to enter the futures contracts market. A hope to raise the cryptoasset’s price is a valid goal. However, Ethereum is also looking for the publicity and demand that might in turn drive up prices. CBOE’s president hopes that more and more cryptocurrencies will join the futures trading market.
Coindesk has reported that the CFTC (Commodity Futures Trading Commission) has already allowed the trading of bitcoin futures as offered by CME (Chicago Mercantile Exchange & Trade Group) Group and the Chicago Board Options Exchange (CBOE), and although this is yet at a budding stage, this could lead to an onset of a new futures exchange product for Ethereum.
One of the main questions that arise when we discuss the possibility of ethereum futures is how will it impact the price. The prices might skyrocket. When Ethereum does become part of the CME and CBOE, there is a high chance to see a price gain of as much 50% from the current levels. For Bitcoin, the jump was about 57% prior to the CBOE announcement.
There has been a lot of speculation and discussion on how the Ethereum futures might impact the markets. Sunil Hirani, founder of TrueDigital explains, “Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities”
Ethereum is expected to grow and gain a much stronger position in the markets with the futures trading. However it is believed that the possible direction may be directly impacted by the Bitcoin path. Any corrections to the Bitcoin will have an effect on ETH as well. The entire market is however keenly awaiting this move into the futures markets.