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Ethereal Things – ETH Futures picking up steam

It has been about 20 months since CME announced the launch of Bitcoin Futures, an announcement that saw the price of bitcoin skyrocket to $20,000 in a matter of months. Ever since then, speculation started around leading derivatives exchanges launching Ethereum futures, but that never came to pass. However, CME’s recent update seems to indicate that the launch of futures contracts for Ethereum may not be far away. 

Specifically, CME announced that it is tweaking the reference rate for ETH prices to include prices from the Itbit exchange, a move that signals that Ethereum Futures could soon be rolled out by CME. In our detailed piece last week on the state of derivatives market in the crypto industry, we had highlighted the fact that futures products offered by regulated exchanges have been so far limited to Bitcoin. CME’s expected launch of ETH futures underscores the credibility of the Ethereum project, something in which several enterprises such as JP Morgan and  E&Y have expressed their confidence.

As seen from the figures below, derivatives market for Bitcoin offerings significantly trumps those of Ethereum. The launch of ETH futures will provide a welcome, necessary conduit for institutional investors who want to bet on the ambitious Web 3.0 narrative through derivatives; as well as providing hedging options for constituencies such as miners and many exchanges that are naturally long ETH and would like a way to swap out some of that risk.

Exchange 24h BTC Futures Volume
Source: Skew
Exchange 24h ETH Futures Volume
Source: Skew

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