CME’s ETH futures saw a demand of 388 contracts traded on its opening day. That’s about a total of 19,400 ETH or approx. $33 Million. Each monthly contract represents 50 ETH.
Similar to CEM’s Bitcoin futures contract, CME’s latest crypto offering is also cash-settled. The launch represents a significant milestone for Ethereum. The trading started on Sunday at 6:00 PM ET, priced based on a CME’s own reference rate. It draws ETH price data from major cryptocurrency exchanges Coinbase, Bitstamp, Gemini, itBit, and Kraken.
Will history repeat itself
ETH price has more than tripled since the CME announced plans to list futures contracts last year in Dec. This pattern is similar to Bitcoin’s price surge when the CME exchange announced Bitcoin futures listing in 2017.
In comparison, Bitcoin futures draw nearly 1000 contracts traded on its first day of launch. The exchange introduced Bitcoin futures during the peak of the 2017 crypto bull run. However, a subsequent price crash diminished trading volumes. This lead many institutional investors who were expected to trade on the Bitcoin futures market to lose interest.
The volumes have turnaround now. As per CME’s reporting, the average daily volume of Bitcoin futures trading at CME reach 11,179 contracts in December 2020. This was amid rising interest from institutional investors.
CME’s regulatory and liquidity advantage offers large traders and institutional investors a degree of comfort that is absent at new crypto exchanges.
Given CME’s broad array of Bitcoin future participants and its position as the world’s premier exchange for futures trading, the ETH futures should soon gain traction as an easy way to get access to the second-largest cryptocurrency and diversify crypto investment.