Ethereum Futures Start Trading on CME

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  • Ethereum futures opened on the CME last night, their first crypto futures offering since 2017
  • When Bitcoin futures were introduced they marked the top of the 2017 cycle
  • Ethereum futures aren’t at risk as much because of two key factors

Chicago Mercantile Exchange (CME) users got their first taste of Ethereum futures as the platform opened last night. At 18:00 ET yesterday, Ethereum futures contracts opened on the exchange, ushering in their latest cryptocurrency offering since Bitcoin futures were offered in December 2017. With the knowledge that the Bitcoin futures introduction helped kill the last crypto bull run, can we expect a similar performance from Ethereum?

Ethereum is a Different Proposition to Bitcoin

When Bitcoin futures were introduced by the CME in mid-December 2017 it came a week after the Chicago Board Options Exchange (Cboe) had opened their own Bitcoin futures books. The CME move coincided with the peak of the 2017 Bitcoin price, which began its bear market from that day onwards. It was later revealed that this was an intentional ploy by the Trump administration to regain control over the spiralling market.

The situation with Ethereum futures is slightly different. Firstly, we are in a different part of the market cycle. The bull run proper only started in July last year, making it around seven months old, and Ethereum is only starting to recover its price against that of Bitcoin following Bitcoin’s surge to $42,000 last month. This means there is less inclination for traders to short Ethereum because it is a more risky move, given that it has only just eclipsed its all-time high from 2017 and hasn’t really got going against Bitcoin yet.

ETH in Demand

There’s also the fact that, unlike Bitcoin in 2017, Ethereum has massive usage. It underpins the entire DeFi movement, as well as a number of top decentralized exchanges, meaning that it is used much more on a regular basis than Bitcoin was in 2017 when it was mainly a speculative asset. When a platform is seeing billions of dollars of daily usage there is much more demand on it, meaning that any selling pressure would be quickly picked up by buyers.

All in all, while there may be some volatility in the market when the first Ethereum futures contracts close later today, any volatility is likely to be short lived and Ethereum will probably return to the mean performance fairly swiftly. After all, Bitcoin futures didn’t seem to do it much harm in the end did it?