Less than a year after the launch of the first futures contracts for Bitcoin, Ethereum could be the second crypto-currency traded on regulated futures exchanges.
It is clear that the Chicago Board Options Exchange (CBOE), the same platform that launched bitcoin futures in December 2017, still has to wait for approval by the Commodities Futures Trading Commission (CFTC) to launch Ethereum options by the end of 2018 . .
The CBOE will base its ETH contracts on the crypto-exchange market of Gemini – the base that it already uses for its Bitcoin futures.
As the US Securities and Exchange Commission (SEC) formally states that Ethereum was not classified as a bond in June, the way forward was probably prepared for the possible launch of ETH futures.
At that time, CBOE Chairman Chris Concannon praised the decision and said that ETH's contracts have been up and running since the end of 2017:
"We are pleased with the SEC's decision to provide clarity regarding current Ether transactions, which deletes a major obstacle to Ether futures, the case we have considered since we launched the first Bitcoin futures in December 2017. . "
Only three months later there are very real grunts that could blossom, as well as the construction of the eventual launch of Bitcoin Futures in 2017.
The CBOE has indicated to the Cointelegraph that it really looks at the future of Ethereum, with attention for Concannon's interview with Quarts in June, in which he explained his thoughts on cryptomoeda and the possibility of a future contract:
"Ether is one of the most liquid crypto coins in. Together with Bitcoin the demand is much greater in Ether than any other crypto in the market." Let's look at the launch on short-term futures, but there is a process that we have to And even before we announce this release, this process is something we've been talking about for a long time with CFTC and we want to take steps in this process and make sure everyone is comfortable with the next product we're announcing. "
According to Concannon there is a great demand for and pull in Ether futures. After successful launch of Bitcoin Futures, the CBOE hopes to use the same design and product structure and apply it to any future crypto that may be observed.
The CBOE would not disclose further details at this time, saying that the relevant information would be communicated in due time.
What can happen
Although the finite details of when we can expect that released Etherfutures have not yet been revealed, the possibility of these new offers had a neutral effect on the various crypto digits.
The price of ETH fell slightly on 31 August, which can be attributed to these first reports. The price of Bitcoin showed a similar movement pattern, with a strong increase on the same day.
Crypto Market 31.08.-01.09.2018. Source: coin360.io
In response to the first reports of CBOE plans, Co-founder of Fundstrat, Tom Lee told Business Insider that Ether futures would have a first negative impact on the price of crypto:
"Since December of this year, if the person in every aspect of the crypto was pessimistic, but did not want to own the underlying asset, they could reduce the BTC, they can now shorten the Ethereum, meaning the short liquid in the BTC futures would fall. "
Good or bad?
It is not easy to predict what a market will do, and this is especially true for crypto coins. However, major steps such as those of large financial institutions seem to influence the price of encrypted currencies.
The Cointelegraph spoke with Mati Greenspan, senior market analyst at eToro, to understand how the launch of Ether futures could affect the price of encrypted currencies.
Greenspan was optimistic about the possibility, saying that Wall Street is working hard to build bridges to the crypto market, calling the launch of Ether futures a critical next step.
Although some people on the social media expressed concern about the fact that aggressive shorts would undermine the value of Ether, Greenspan offered a counter-argument to that point:
"Short-term capacity is a crucial part of price discovery, so that is actually a healthy business for the market."
In addition, Greenspan believes that a future Ether contract will put criptomoeda in the spotlight, which could attract new investors with deep pockets. The eToro analyst also believes that this can have an indirect effect on other crypto-currencies:
"Cryptomaned prices are strongly correlated with each other, so everything good for Ethereum should be good for Bitcoin and vice versa So far, Bitcoin's future volumes were relatively small and insignificant for the rest of the market, but as institutional interest investors, we should see larger volumes and new ways of trading. "
Although Greenspan offers a much more optimistic prediction of what is to come, there are people who have a more cautious picture of the possible launch of the Ether futures.
Phillip Nunn, CEO of Wealth Chain Capital, told the Cointelegraph that it is possible for some investors to shorten Ether, which could have serious consequences for companies that have launched ICOs in the Ethereum blockchain.
Nunn compares the launch of future BTCs with foreign exchange markets about 30 years ago, where futures markets had a major impact on the markets:
"2018 saw an enormous change in the behavior of cryptography, mainly as a result of the arrival of Bitcoin futures, the graphical displays were different and there was clear evidence of market manipulation and" whales "dominated the market anyway. is similar to FX markets in the eighties and nineties, where it was easy to influence markets through longs and shorts. "
In addition, Nunn's websites represent risky futures for companies that have raised money with tokens ERC20:
"I'm worried about ETH at some levels, firstly, the market capitalization is much smaller than Bitcoin's, and I think ETH futures can fall below $ 150, perhaps up to $ 100. % of ICO & # 39; s raise money with ERC20 tokens at ETH, if an ICO has raised $ 20 million and kept it at ETH, this is all of a sudden and I think this will trigger the sale of those companies to BTC or FIAT to protect their interests. "
Although the future track of the crypto has been shocked by Bitcoin, it may be difficult to draw conclusions from the launch of BTC Futures in December 2017.
Shortly after the CBOE and the Chicago Mercantile Exchange (CME) launched their respective futures deals, Bitcoin reached a record high of just over $ 20,000 before a humiliating correction left the markets red for months.
Although several factors played an important role in the significant downturn in the crypto markets, life was difficult when it came to assessing how BTC futures influenced the markets and influenced prices.
In July, CME indicated that it would not launch any further crypto-mobile offer. However, it reported data showing that the average daily volume of BTC futures increased by 93% in the first quarter of 2018.
Given the growth in the number of BTC forward contracts in mid-2018, it may be reasonable to assume that there is a growing need for this type of financial offer in the cryptomoeda space.
However, the possible launch of Ether's future will be a space that will be monitored in the coming months. As Nunn summarized in his remarks to the Cointelegraph, the prediction in crypto-space was just as good as a shot in the dark:
"Of course I can be wrong and it could reach $ 1000, but it seems that future strategies serve to suppress the real growth of the cryptomoeda, and this certainly happened with Bitcoin, because all the prognoses are out of the window."