CME Group announced the inclusion of Ethereum (ETH) futures to its financial products as early as February 2021. What does this imply? We tell you the details!
Ethereum Futures by CME Group
Chicado Mercantile Exchange (CME) is the second largest derivatives exchange in the world and we must bear in mind that it is not its first foray into the crypto market.
We must remember that, in December 2017, CME began offering Bitcoin futures and, we must also keep in mind what that meant for the leading crypto.
Perhaps some will remember and others will not, but on that day Bitcoin reached its all-time high of 2017. So the question is: Will the launch of this financial product also be a catalyst for Ethereum?
CME is not afraid to enter the crypto market
CME expects to begin offering Ethereum futures on February 8, 2021. However, it must first receive the necessary regulatory approval.
“Based on growing client demand and strong growth in our Bitcoin futures and options markets, we believe that the addition of Ethereum futures will provide our clients with a valuable tool to trade and hedge this growing cryptocurrency.“CME explained in the statement.
Additionally, the new product will be settled in cash and will be based on the company’s CME CF Ether-Dollar benchmark rate.
However, despite clear evidence as to how it impacted Bitcoin, we cannot be sure whether CME will help catapult the price of Ethereum.
Remember that futures are contracts to buy or sell an asset on a specific date if it has reached a certain price. Consequently, futures are viewed as bets on price, both up and down.
And therefore, the addition of futures to the Ethereum market does not necessarily impact positively. Also, as we previously mentioned, CME futures will be cash settled and that means no Ethereum is being traded.
Even so, this last point represents an entrance to institutional investors since it reduces the variables they should worry about.
In the meantime, it seems that we are in a wave of crypto adoption that will arrive in 2021. Recall that both Cboe and S&P reported the launch of crypto products. We want to know your opinion!