The Chicago Mercantile Exchange has announced it will offer ether futures early next year.
According to a Dec. 16 announcement, the exchange, known as CME, intends to launch Ether futures starting February 8, 2021, pending regulatory review.
The addition of ether futures to the “time-tested, regulated CME Group derivatives marketplace” will help Ethereum investors better manage price risk, said Tim McCourt, the CME Group’s global head of equity index and alternative investment products. He added:
“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.
The upcoming Ether futures contracts will be cash-settled and will track CME’s CF Ether-Dollar Reference Rate. The contracts will be listed on the Chicago Mercantile Exchange and subject to its rules.
This product opens the gates of ether trading to institutional investors, who are limited to highly regulated platforms that are well-known in the world of traditional finance.
The new futures contracts were announced just as Bitcoin just broke $20,000 and then $21,000, reaching new all-time high prices thanks to a push of institutional adoption. This upward market movement also influenced ether, which reached a 2.5-year high today, breaking $600.
The announcement of the new derivative product also follows the Ethereum 2.0 phase 0 launch which took place at the beginning of the month. The launch of the first version of Ethereum’s proof-of-stake network is seen as a major development in the space, one that the community waited long for and that saw multiple delays.
This is the first altcoin-based product by the Chicago Mercantile Exchange. The company launched Bitcoin futures in mid-December 2017, and Bitcoin options in mid-January this year.