Ethereum futures quietly launched on the CME derivatives exchange late on Sunday night — with ETH prices remaining largely flat on the first day of trading.
The long-awaited debut could make it easier for institutional investors to gain exposure to the world’s second-largest cryptocurrency, without needing to own the underlying asset.
Futures are a type of contract where a buyer commits to buying an asset at a predetermined price in the future. This opens the door to bearish investors who may bet that ETH’s value will fall in the future — and enables current Ether investors to hedge their risk.
ETH hit a record high of $1,764.55 in the run-up to the futures launch, but had slipped to $1,689.56 at the time of writing.
There are mixed feelings on the crypto scene, with some analysts claiming that Ether futures could negatively impact prices. The launch of Bitcoin futures back in December 2017 coincided with BTC’s price tumbling from then record highs of $20,089.
ETH futures aren’t expected to take off from day one — and as of Monday morning, just 77 contracts had been traded. CME Group executive Tim McCourt said:
“The addition of Ether, along with our liquid Bitcoin futures and options, will create new opportunities for a broad array of clients, whether they are looking to hedge ether positions in the spot market or gain exposure to this cryptocurrency on a regulated derivatives marketplace."
The launch has been overshadowed by the headline-grabbing announcement that Tesla has purchased $1.5 billion in Bitcoin — with the electric vehicle maker announcing that it plans to accept the cryptocurrency as a payment method in the not-too-distant future.
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