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CME: Ethereum futures trading goes live

Updated: Aug 31, 2024
Published: Feb 8, 2021
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Chicago Mercantile Exchange (CME), the world’s leading derivatives marketplace, officially launched the trading of Ethereum futures on Feb. 8 at 6 PM ET.

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The derivatives marketplace finally launched its product which was received with excitement and fanfare within the crypto community after it was announced in mid-December last year.

The Commodity Futures and Trading Commission former Chairman Heath Tarbet predicted in 2019 that ETH futures would eventually be launched.

Ether futures product launched

CME’s Ether futures product is the first of its kind in the U.S. The exchange has traded at least 76 contracts so far.

Announced last year, the futures are cash-settled and based on a reference rate that draws its data from a basket of major exchanges that include Bitstamp, Coinbase, Gemini, itBit, and Kraken.

The CME Group’s list of liquidity providers for this product includes BlockFi, Galaxy, Genesis, Coinshares, XBTO, Ledger Prime, GSR, Cumberland, IMC, and NYDIG. Some of these firms already provide liquidity to CME’s bitcoin futures and options products.

CME launched its Bitcoin futures on Dec. 17, 2017, and “there has been significant growth in their adoption from a broad array of participants, including institutional investors,” the derivatives exchange said.

In 2020 alone, the derivatives marketplace traded a daily average of 8,560 Bitcoin futures contracts or 42,800 BTC.

“At the same time, institutional interest continues to build with the number of large open interest holders reaching a record of 110 in December.”

Institutional interest poised to surge

The ether product is likely to draw more institutional investors for the cryptocurrency which has remained in bitcoin’s shadows for a long time.

Messari co-founder and cryptocurrency researcher Qiao Wang said traditional financial institutions that have invested in bitcoin are opening their financial doors to Ethereum.

“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,” he tweeted.

Ethereum’s performance

Ethereum has enjoyed a stellar performance since the start of the year. The second-largest cryptocurrency is up nearly 124% in year-to-date performance.

Like bitcoin, Ethereum has surpassed the peak it reached in the 2017 - 2018 bull run.

Ethereum’s price has nearly tripled in value since the announcement of the CME Ether futures product.

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