After Bitcoin at the beginning of 2021, the global derivatives specialist Chicago Mercantile Exchange (CME) is now planning to launch futures contracts on Ethereum.
Nothing has been decided yet as the regulators have not yet given their approval. However, the news is reassuring and the contracts in question will be worth 0.1 ETH by the end of 2021. So it’s another stroke of genius that the CME is trying to implement to further expand its futures offering in the crypto universe.
CME’s influence continues to grow
Without premeditation, CME is shaking up the order of the crypto market. It is offering more to institutional investors, while retail traders can source from platforms like Binance and FTX to some extent. All indications are that within a few months, average traders will have less influence than in the past. This is due to the so-called “qualified” public, which will have more decision-making power than in the past. They will be able to dictate the pace and will of the market. This group can easily bet on a fall or a decline. The transactions made on ETH futures contracts are the perfect illustration of the observation made. Indeed, these contracts will be more likely to attract the finances of institutions. In the coming months, it will therefore be important to keep an eye on the closing dates in order to make objective analyses of the market and the movements made.
This is not the first time WEC has tried this
When one mentions the CME group, a link is directly established with derivatives trading. Indeed, the firm is a giant in this field and is constantly expanding its influence. It has been interested in virtual currency derivatives for several months now. To achieve this, it is launching micro futures contracts as it did with Bitcoin. Introducing contracts of a limited size is intended to attract investors of all sizes. Especially for crypto-currencies with a very high value per token like Ether and BTC. Unlike large-scale projects that only attract institutions, this new contract category has the merit of redistributing the cards between clients.
What explains the choice of Ether?
The choice of Ether to offer futures was no accident. It was in response to the ever-increasing demand for this asset, which has been breaking records since the very first futures contracts were launched. The advantage of this product is that it reduces the exposure of investors, with less risk and a more certain gain. Between the start of the project with the small contract proposals and now, the value of Ether has almost doubled. Micro contracts are more accessible to all pockets with more choice. Here you know in advance how you will trade your Ether futures, reliably and legally within the Chicago Mercantile Exchange Group.
The launch date is known
As you will have understood, and the category of contract refers to financial instruments from participants, it is possible to obtain or sell an asset at a specific price and on a specific date chosen long in advance. For the case in point, it must be said that, pending approval by the regulators, transactions will in principle take place on 6 December. We already know that the payment in this type of futures contract offered by the CME Group is in cash. The basis of payment takes into account the dollar Ether reference rate. So this is very good news for investors, especially if things stay focused, as Ether is doing well and continues its march forward.