The Chicago Mercantile Exchange (CME) Group, a leading United States derivatives exchange, has launched the much-anticipated Ethereum futures contracts on Sunday after the initial announcement late last year.
The derivatives exchange announced on Twitter that ETH futures went live at 6 pm (Eastern Time) on Sunday “for a first trade date of Feb. 8.”
Kicking off this Sunday evening: Ether futures start trading at 6:00 p.m. ET for a first trade date of Feb. 8. https://t.co/vc2hkZf9ql
— CME Group (@CMEGroup) February 7, 2021
The contracts were opened at a price of $1,669.75 when the Ethereum market price was around $1,600. The contract details on the CME website show that there will be 50 Ether on each contract, and they will be cash-settled.
Institutions need to purchase at least five contracts.
Will Ether Be Institutions’ Second Choice?
Derivatives are seen as the preferred institutional investment mode. Though many foreign exchanges are already listing ETH futures, CME is the first US exchange to list these contracts, allowing US investors to trade them.
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The listing came at a time when Ether is on a bull run, and its prices touched an all-time high.
Cryptocurrency analysts are getting more bullish on the prices of Etherum, some even predicting the prices to go up to $5,000 to $20,000 levels by the end of this year.
The earliest traditional financial institutions that bought BTC are already looking at ETH, if not bought already. And rightfully so. The most used cryptonetwork + future of finance + a potential deflationary monetary policy narrative make it extremely compelling.
— Qiao Wang (@QwQiao) February 7, 2021
As derivatives are a significant financial product for any asset, we have seen its impact on Bitcoin. Cboe launched the first Bitcoin futures in the United States in December 2017, followed by CME Group. Then, Bitcoin toughed the iconic $20,000 previous peak before plummeting heavily. The cryptocurrency is now peaking at around $40,000.
Many institutions have invested heavily in Bitcoin in recent years. Now with Ethereum derivatives in the market, it is to be seen if a second digital currency can gain the trust of the institutions, despite many of its technical flaws.