Ethereum Futures Are Now Trading on CME

The Chicago exchange has now traded 77 ETH contracts after going live on Sunday.

Feb 8, 2021 at 10:04 a.m. UTC
Updated Sep 14, 2021 at 12:08 p.m. UTC

The Chicago Mercantile Exchange (CME) has launched its much-anticipated futures contracts for ether (ETH), the native cryptocurrency of the Ethereum blockchain network.

Announced in mid-December, trading in ether futures went live late Sunday, with the February contract registering an opening price of $1,669.75. At the time, the spot price stood at around $1,600.

The Chicago-based exchange has traded 77 contracts so far, with most activity concentrated on the February expiry. The futures contracts are legal agreements to buy or sell the crypto asset at a predetermined price at a later date.

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CME ether futures

CME's ether futures are cash-settled and based on the exchange's reference rate that includes data from major cryptocurrency exchanges Bitstamp, Coinbase, Gemini, itBit and Kraken.

The CME's regulated ether futures product may draw more institutional demand for the second-largest cryptocurrency by market value, boosting the recent price rally.

"The earliest traditional financial institutions that bought BTC are already looking at ETH, if not bought already. And rightfully so. The most used crypto network + future of finance + a potential deflationary monetary policy narrative make it extremely compelling," Qiao Wang, cryptocurrencies researcher and investor and co-founder of Messari, tweeted on Sunday.

Wang foresees ether rallying to $5,000 and higher in the long run. Ether is trading near $1,632 at press time, a 1% gain on the day, having reached record highs above $1,700 on Friday.

The cryptocurrency has more than tripled in value since the CME announced plans to list futures contracts on Dec. 16, mimicking bitcoin's surge from $6,000 to $19,783 seen in the weeks leading up to Dec. 17, 2017, when the exchange began trading bitcoin futures.

While bitcoin topped out on the same day and subsequently moved into a year-long bear market, ether is likely to remain bid. "The market is now more mature, the macro is different, and there are different players involved," trader and analyst Alex Kruger tweeted last week, ruling out a significant crash in ether.

Wang also voiced a similar opinion Sunday, warning that betting on an ether bear market would be "the worst trade of your life."

Patrick Heusser, head of trading at the Swiss-based Crypto Finance AG, foresees ether leading the broader market higher. "I have turned long on ETH/BTC over the weekend and reduced some DeFi exposure," Heusser told CoinDesk. "I see no connection to the ETH futures listing and a specific price action linked to it."

Correction (Feb. 12, 2021, 20:42 UTC): The CME's is not the world's first regulated ether futures product. It is the first U.S.-regulated and cash-settled ether futures product.

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