- The mood in the cryptocurrency market is somewhat disturbed this Monday morning, as the recent launch of CME’s Ethereum futures could cause asset prices to drop as they did with Bitcoin. However, some still expect a surge on asset.
The mood in the cryptocurrency market is somewhat disturbed this Monday morning, as the recent launch of CME’s Ethereum futures could cause asset prices to drop as they did with Bitcoin. However, some still expect a surge on asset.
The fear among many is that the massive market crash that occurred after similar futures products were first launched by the major Bitcoin exchange in December 2017 will be repeated.
Futures effectively allow institutional traders to short the asset, and considering Ethereum is hovering at its all-time highs, the majority will likely do so.
The Chicago Mercantile Exchange will launch Ethereum Futures today on February 8 and offer contract units of 50 ETH financially closed (paid in US dollars, not ETH).
The crypto community’s reaction
In a tweet on Feb. 7, analyst Alex Krüger stated that futures are on the rise for overall institutional demand for Ethereum, which he added as a beta asset that tracks Bitcoin.
“CME futures will enable Grayscale to increase the spot demand and squeeze the ETHE premium by increasing the corporate demand for ETHE by those parties who currently have difficulties in accessing ETH markets to avoid ETHE risk.”
Messari researcher Ryan Watkins reiterated the thought that market conditions are now very different from 2017 and institutions will not rush to sell ETH.
“Fear of the upcoming launch of ETH CME futures is absurd.”
This fear not only stems from a data point, but there are clear differences between market conditions in December 2017 and current market conditions.
DeFi Alliance member and industry watchdog Qiao Wang is also on the side of the bulls and still predicts a big gain for Ethereum at the end of 2021.
To add balance to the bullish, crypto analyst and trader ‘Crypto Whale’ posted the chart following the launch of BTC futures in 2017, saying “now is not the time to buy this. The bull market is finally over and rookies are on hold! ” says.
Ethereum price view
At the time of publication, Ethereum prices had been trading steadily for just over $ 1,600 in the past 24 hours. It hit an all-time high of $ 1,760 on Friday, February 5th, and prices fell slightly below $ 1,500 late Sunday before settling down a bit during the Asian session Monday morning.