Since December 2017, Bitcoin futures contracts have become available on CBOE Stock Exchange. They are very popular and have become one of the most important leverages on the cryptocurrency market. After the success of Bitcoin futures became evident, there was an active discussion of the need to launch futures for the main altcoin – Ethereum. At the end of August 2018, there appeared information that the Chicago Stock Exchange had taken up this issue seriously.
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Cryptocurrency Futures – What Is It?
To begin with, futures (futures contracts) are contracts, according to which one party undertakes a commitment to sell a certain asset (share, commodity, crypto currency) at a certain price and on a timely basis, and the other party undertakes a commitment to buy it. This resembles a dispute between the parties regarding the price of the contractual asset.
The emergence of bitcoin futures on the Chicago Stock Exchange made a sensation in the cryptocurrency market. Many experts even associate market growth in December 2017 – January 2018 with this. The popularity of bitcoin futures contracts showed the viability of the crypto. It was “legalized” and serious institutional investors began to pay attention to it.
In 2018, ETH, XRP, BCH, and LTC futures became available to public. However, very few people know about this. The launch of these altcoins futures did not have a big impact on the market. The fact is that this financial instrument is available on the British platform Crypto Facilities. There is a small trading volume on this website.
Ethereum Futures on CBOE
In June 2018, the US Securities and Exchange Commission (SEC) decided that Ethereum would not be treated as securities. This decision opens up opportunities for US residents to launch Ethereum futures due to the procedure simplification.
The fact that СВОЕ will use this chance became clear after the exchange president of the Chris Concannon expressed satisfaction with the SEC’s decision and noted that the issue of the launch of Ethereum futures had been continuously discussed since the end of 2017.
So far, there is no official information from representatives of СВОЕ, but various information resources are already actively referring to insiders. According to the publicly available information, СВОЕ will not invent anything new, but will take advantage of the successful Bitcoin-futures experience. The already tested design and structure of the product will be used. The contracts will be based on Gemini, a crypto exchange by the Winklewoss brothers.
When Will Ethereum Futures Be Launched?
Again, Ethereum futures are already available. But we are all interested in futures trading on a serious platform called CBOE.
The launch will occur as soon as the Commodity Futures Trading Commission (CFTC) issues an appropriate permit to the Chicago Stock Exchange. Most likely, this will happen in December 2018. Although many experts are waiting for Ethereum futures to appear in October-November 2018.
The exact date cannot be provided by anyone. But be sure that Ethereum futures will be forthcoming very shortly.
How Will Ethereum Futures Affect the Market?
Experts’ opinions diverged. Tom Lee, for example, is not thrilled about it. He argues that the launch of futures will negatively affect the ETH rate. We would like to note that he talked neither about the fall nor collapse of the Ethereum price. Most likely, he referred to the fact that the coin will become more stable, and therefore will not show significant growth. However, futures will protect it from depreciation.
Many experts do not worry about the Ethereum price, as they are confident that the launch of Ethereum futures on СВОЕ will attract huge amounts to this crypto currency.
We agree with both standpoints, because they do not contradict each other. Ethereum futures will make this currency more stable, which does not cancel its growth forecasts. The intervention of institutional investors will strengthen Ethereum position. We believe that the market needs this financial instrument.
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