Ethereum surged over 11% this weekend with rumours surfacing that a potential futures contract may find regulatory approval from The U.S. Commodity Futures Trading Commission (CFTC). This has the potential to bring in fresh liquidity at institutional levels. It would also increase confidence in other regulatory bodies such as the SEC.
An Ethereum futures contract would follow on from the Bitcoin counterpart, launched by the CBOE and CME groups respectively. The launch of these futures conveniently timed to launch all-time highs) was heavily linked to the beginning of the crypto bear market (and subsequent failure to recover since. However, an Ether contract is being met with fresh optimism. With some funds having certain terms that prevent actual investments into a certain cryptocurrency, a futures contract which pays out in fiat would be a sensible way around this stumbling block.
Back in December 2018, talk of any Etherum futures contracts was met with hesitation from the CFTC, asking for public feedback to clarify what was described as “fundamental” issues that needed addressing. The subsequent “Request For Information” (RFI) was met with a “very good response” from the public, and this time around, the process to launch any such contract may well be much smoother sailing. The significance of these rumours was seen throughout the market. Usually, any surge or dump is led by BTC, however, it was the smart contract platform Ethereum that led this current surge. Should the contracts be given the green light, the effect on the rest of the market may be even more prominent.
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