Chicago-based CBOE would launch Ethereum futures in the coming months. This information, reported by Business insider, CBOE would make the first exchange in the United States to have such a list.
Reduce the risk
In cryptocurrency, investors can buy or sell a certain asset at a specific price at a specific date in the future using futures trading. These transactions are used to limit investment risks because the contract between investor and stock exchange is unchangeable.
The source states that future futures can be introduced by the end of this year, with the Cryptocurrency Exchange from Winklevoss Twins, Gemini, which provides the price data. Gemini already supplies the data for the Bitcoin futures of CBOE, which started last year at the end of last year.
Before going any further, CBOE wants some extra attention from the Commodity Futures Trading Commission (CFTC). This group is led by a Christopher "Cryptodad" Giancarlo, who has always loved cryptocurrencies.
It is important to note that the Securities and Exchange Commission (SEC) regards neither Ether nor Bitcoin as a security. This means that CBOE may be less challenging in setting up Ethereum futures due to a lack of regulation around the asset.
From BTC to ETH
As one of the exchanges to push Bitcoin futures, it is only logical that CBOE jumps to Ethereum next. The currency is the second in market capitalization only for Bitcoin, with a convincing use case to boot. That does not mean that CBOE is interested in all kinds of different cryptovalut projects that feed this choice.
However, some have argued that futures trading increases the possibility of cracking the price of an asset. In a market that is as volatile as cryptocurrency, that is a real problem that can contribute to a substantial fall in Ethereum's prices.
Cryptocurrency moving to the mainstream is becoming more likely. CBOE has also done research on Bitcoin ETFs, while Gemini is also comfortable with the NASDAQ stock exchange.
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