Cryptocurrency futures have proven to be somewhat intriguing traditional trading vehicles. More specifically, they allow institutional investors to be exposed to cryptocurrency without buying Bitcoin directly. It now seems CME is looking toward the future by introducing Ethereum indexes. It’s an interesting development, although Ethereum futures contracts are not on the roadmap as of yet.
What is CME Cooking?
When CME, together with Cboe, announced the launch of Bitcoin futures contracts, there was some initial excitement among cryptocurrency enthusiasts. The concept has a lot of merit, as it theoretically allows institutional investors to pour money into cryptocurrency, albeit indirectly. Unfortunately, things have not gone according to plan, as overall institutional interest in Bitcoin futures has been lower than originally expected.
That doesn’t mean this investment vehicle isn’t an important development for the cryptocurrency industry. Month over month, the trading volume for both CME and Cboe futures is on the rise, which can only be considered a good thing. CME is now taking things to a whole new level by officially launching indexes for Ethereum. While they’re not the same as Ethereum futures contracts, the two concepts have a fair few similarities.
Two separate indexes have been created to track the Ethereum value at all times. As one would expect, the launch of these new indexes has already led to a fair amount of speculation. Many see this as a stepping stone toward CME introducing Ethereum futures contracts, but it remains unclear if and when that might happen. The company confirmed it has no plans for additional futures products, despite the structure of these Ethereum indexes being eerily similar to Bitcoin futures.
These two indexes are pretty interesting vehicles in and of themselves. The first one focuses on the ETH/USD ratio, and provides a daily price at 11 AM ET. Additionally, there’s the Ether-Dollar Real-Time Index, which provides a lot more up-to-date information. Both indexes receive their price information from Crypto Facilities, a company which recently introduced Ethereum futures to the masses.
With the recent Ethereum price trend becoming more visible, it’s not entirely surprising to learn that more financial service providers are paying attention to cryptocurrency. While Ethereum is still a long way removed from its all-time high price of late 2017, it is evident that things are progressing rather nicely at this stage. If companies decide to launch Ethereum futures at some point in the future, the world’s second-largest cryptocurrency by market cap may see a lot of positive changes.
This move also confirms that the cryptocurrency industry is still firing on all cylinders as we speak. Although it will be very difficult to convince the average person on the street to buy either Bitcoin or Ethereum, institutional investors may feel otherwise. A very exciting future lies ahead for all cryptocurrencies, although one has to keep the bigger long-term picture in mind at all times.
