The CME Group has announced that they will be listing an Ethereum (ETH) futures product next year – another huge step for crypto adoption.
CME Group legitimised crypto derivatives in the eyes of traditional investors when they launched their Bitcoin futures contract at the height of the 2017 bull run. Just as Bitcoin topped $20,000, CME told the world that they now plan to dabble in futures tied to Ethereum.
Ethereum futures are expected to come to market February 8, subject to regulatory approval. It will be cash-settled and based on the firm’s CME CF Ether-Dollar Reference Rate. According to CME’s website, one contract will be worth 50 ETH.
Tim McCourt, CME Group’s Global Head of Equity Index and Alternative Investment Products, spoke on how the success of the Bitcoin futures was a key driving factor towards their decision to launch an ETH futures product.
“Building on the success of Bitcoin futures and options, CME Group will add Ether futures to the cryptocurrency risk-management solutions available to trade in February,” Tim McCourt.
In the past, a lack of institutional investment vehicles placed another barrier between cryptocurrency and traditional institutional investors. This meant that the market as a whole was very emotional and sensitive to the slightest bit of news; thus, leading to erratic volatility.
As the regulatory framework around Bitcoin and custodial services for institutions have become more solid and reliable, institutions have become far more comfortable getting involved in cryptocurrency. At the end of the Q2 of 2020, Fidelity reported in a survey of almost 800 institutional investors that 36% owned cryptocurrency assets. A separate survey, conducted by crypto asset insurance company Evertas, shared that respondents believe hedge funds will increase their crypto holdings dramatically.
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