25.10.2021

CME Group will launch Ethereum Futures. Why is this important for ETH holders?

North America’s largest financial derivatives market, CME Group, has announced that it will list Ethereum futures next year. This is reported by The Block, citing an official source. This means that very soon ether will be available to large investors who can afford to make serious investments in cryptocurrencies.

We checked the actual numbers: Ethereum is trading at $ 653 today, which is 11.8 percent ahead of the previous day. Thus, the market capitalization of Vitalik Buterin’s project exceeds $ 74 billion, which is significantly more than his closest pursuers. XRP, USDT and LTC capitalizations are $ 25, 20 and 6 billion, respectively.

Here is a graph of the cryptocurrency rate for the last three months. The uptrend – that is, the upward movement of the rate – is more than obvious here.

Ethereum price chart for three months

Over the month, the cost of ETH has grown by 41 percent, and over the year – by 390 percent. The corresponding indicators of Bitcoin are 35 and 228 percent, that is, Ethereum bypasses the first cryptocurrency in terms of profitability.

Ethereum listing on CME

The new trading instrument will appear on the CME on February 8, but for now, before its launch, the necessary instructions are being prepared, taking into account the requirements of financial regulators. The platform will be settled in cash and based on the CME CF Ether-Dollar reference rate. According to the CME website, one contract will be equal to 50 ETH, that is, at the current rate, you will have to pay $ 32,650 for it.

Here is a quote from the official publication on this matter.

Building on the success of Bitcoin futures and options, CME Group will add Ethereum futures to cryptocurrency risk management solutions as early as February.

It is noteworthy that around the same days, three years ago, CME Group launched Bitcoin futures on their platform for the first time. Some even believe that this event was one of the reasons for a serious drop in the price of BTC already in 2018. However, now the cryptocurrency industry has become much more mature, in addition, the current state of the market is not overheated. Therefore, it is possible that the new instrument will positively affect the situation with ETH.

We believe that such a move from CME will spur institutional interest in ether and altcoins in general. This year we have already witnessed a boom in decentralized finance this summer, which has brought dozens of X’s to many crypto enthusiasts. Let’s hope that soon we will have more than one such “altcoin season” with huge pumps and Ethereum growth above the all-time high at $ 1448.

The main reason for growth is not only the confident movement of Bitcoin and the leap of cryptocurrencies in general, but also the renewal of the ETH blockchain. Recall that in the coming years, Ethereum will switch to version 2.0, which involves the use of the Proof-of-Stake consensus mechanism and the rejection of PoW mining on video cards. As a result, the network will become much faster and more scalable. The first step in moving eth to PoS has already been taken. Read more about it and the system of punishing dishonest validators in a separate article.

We believe that this news for the market is unequivocally positive, in addition, representatives of the platform perfectly guessed the time of the announcement: this happened after Bitcoin grew above 20 thousand dollars, that is, against the background of general euphoria. Accordingly, the momentum for the ETH jump has become even stronger.

Hopefully, the appearance of Ethereum on CME will really attract the attention of large investors to both ETH and other cryptocurrencies. Yet they are still focused on Bitcoin, which is holding back the rest of the market anyway.

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