Is the Upcoming Cboe Ethereum Futures Market a Bad Thing?


Cboe, which notably launched the first fully-regulated bitcoin futures market last December, is reportedly telling market makers that it will soon launch an Ethereum (ETH) futures market

According to a report by Business Insider, which cites an individual familiar with the matter, the Cboe is currently awaiting further clarification from the Commodity Futures Trading Commission (CFTC) before fulling launching the futures product.

Similar to the impact of the initial Bitcoin futures market, which initially helped propel Bitcoin to above $19,000 before aiding in its rapid drop, some analysts view Ethereum futures as a big plus for second largest cryptocurrency.

Danny Kim, head of growth at SFOX, a crypto trading technology firm, told Business Insider that he sees the upcoming Cboe market has a big boost for Ethereum.

Cboe’s offering will enable crypto traders to take both long and short positions in ether, and it’s another step forward to a new accepted asset class. With this, I think the new investment opportunity will take crypto out of the bearish market and reverse to a new bull.

However, some analysts see the new market as a net negative for the future price of Ethereum.

Tom Lee, the co-founder¬†of market strategy firm¬†Fundstrat Global, believes a similar narrative to the Bitcoin futures launch will play out¬†where there might be an initial boost in price, but ultimately more downward pressure on Ethereum’s price. Lee also believes that the new market will work to take some short-side pressure off of Bitcoin, as institutional investors will be able to diversify between the two digital assets.

Ultimately, the outcome of the new Ethereum futures market will reach an equilibrium between the price boost resulting from increased adoption and institutional investor attention, and the downside from greater exposure to bearish contracts.

ETH is currently the 2nd largest constituent in the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens.

More: Cboe is telling market makers that it’s getting close to launching ether futures ‚ÄĒ and it could mark a big step in the crypto’s evolution
Similar: The First Regulated Bitcoin Cash (BCH) Futures Market Is Now Live

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

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