Ethereum, the #2 cryptocurrency by market cap, has just finished up its first 24 hours trading on the CME – The Chicago Mercantile Exchange. The futures contract is cash settled, which means no ETH is actually being traded, which is how the CME operates its Bitcoin futures as well. The first day of trading saw $33 million in volume, a number which will increase as time goes on.
The launch was largely overshadowed by Bitcoin, the #1 cryptocurrency by market cap. It had posted new all time highs, fueled by Tesla putting 7.5% of its cash reserves into Bitcoin, which comes to 1.5 billion USD.
Bitcoin overshadowing Ethereum has been a trend in the crypto world so far, but the #2 cryptocurrency has been gaining ground year after year. A case could be made for Ethereum being the best cryptocurrency, and this past year saw Ethereum provide better returns for investors than Bitcoin.
Why this is important
The start of Ethereum futures on the CME is the first regulated futures contract for Ethereum. The CME is the worlds largest financial derivatives market, offering futures and options across all major sectors. The big players in finance trade here, along with retail investors. Ethereum futures being listed here can be seen as a cosigning of the legitimacy of Ethereum for many institutional investors who are looking to get into the crypto markets.
Right now, Bitcoin is all the rage in the traditional investor community. Bitcoin was added to the CME in 2017 and according to the exchange investor interest is growing for cryptocurrency.
“As institutional demand for transparent, exchange-listed crypto derivatives continues to increase, we are pleased to launch our new Ether futures contract,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. “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 positive benefits for Ethereum
Bitcoin is greatly benefiting from institutional money at the moment, with many corporations seeing the crypto asset as a hedge against inflation. As interest in the space rises, similar projects will receive attention from institutions. Ethereum is billed as the worlds super computer, targeting a very different market than Bitcoin. On Ethereum, you can trade a futures contract on a regulated exchange, or enter the world of DeFi and be your own mini banking institution.
This is a welcome and positive development for Ethereum, and signals a very bright future for the #2 crypto asset.