The CME Group to Launch Ether Futures in Early 2021

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In Brief
  • CME Group, the largest financial derivatives exchange, will be launching Ether futures contracts in early 2020.

  • This follows the success of its Bitcoin futures contracts, which trade with over $880 million in daily average volume.

  • This offering will be available to all of the CME Group's institutional investor clientele.

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The CME Group, a global markets company, and the world’s largest financial derivatives exchange, has announced that it will be launching Ether futures contracts for institutional traders.



The move will allow large players to gain exposure to the Ethereum network. Once the exchange receives the regulatory nod, the CME Group will allow Ether futures trading to begin in February 2021, just a few months away.

This will be Chicago Mercantile Exchange Group’s second foray into cryptocurrency futures trading. The emerging asset class is but a small fraction of its offerings that generated almost $5 billion in revenues in 2019.



Getting More Involved in Crypto

The CME Group also offers its clients the option to trade Bitcoin futures contracts, which have been quite popular. Tim McCourt, the CME Group Global Head of Equity Index and Alternative Investment Products explained:

“Based on increasing client demand and robust growth in our Bitcoin futures and options markets, we believe the addition of Ether futures will provide our clients with a valuable tool to trade and hedge this growing cryptocurrency.” 

Year to date, the equivalent of 42,800 bitcoin currently worth over $880 million are traded on average every day via the group’s Bitcoin futures contract platform.

McCourt continued:

“Ethereum is the second-largest cryptocurrency by both market capitalization and daily volume. The introduction of listed Ether futures to our time-tested, regulated CME Group derivatives marketplace will help to create a forward curve so Ethereum market participants can better manage price risk.”

Big News for Ethereum?

As the largest financial derivatives exchange globally, this addition will likely increase institutional investor exposure to Ethereum.

As its Bitcoin futures trading continues to grow, the CME Group is likely betting that a similarly-created Ethereum alternative will garner interest amongst its clientele.

The DeFi Drawcard

Ethereum is still in its first month of migration from ETH 1.0 to ETH 2.0, and additional adoption appears to be on the cards.

With the move from Proof-of-Work (PoW) to Proof-of-Stake (PoS), Ethereum should validate transactions faster and cheaper.  In addition, Decentralized Finance (DeFi), mainly built via applications on the Ethereum blockchain, has taken off in 2020.

With over $15 billion in total value locked (TVL), Ethereum is witnessing more users flock to its decentralized applications. Technical and fundamental advancements aside, the addition of an institutional-grade futures solution points to increased growth on the network.

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Harrison is an analyst, reporter, and lead specialist at BeInCrypto based out of Tel Aviv, Israel. Harrison has been involved in the cryptocurrency space since late 2016 and is passionate about decentralized ledger technology and its potential.

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