CME set up Bitcoin futures mid-December, just one calendar year after launching Bitcoin indexes. Many hoped that the futures would bring about better institutional investors, helping send Bitcoin costs further on its path to the moon. But as of this week, Bitcoin traded at $8,700, less than half of its peak highest-ever value from last December, $19,000.
Why does that matter? This week, CME has launched two Ethereum indexes. While CME claims that it does not have plans for Ethereum futures, this is very similar to when Bitcoin indexes were added prior to the futures launch.
“The focus right now is on the index itself,” said Tim McCourt, managing director and global head of equity products and alternative investments at CME.
The second largest cryptocurrency by market cap, Ethereum is currently around $730, also about half of its all-time high.
The two indexes launched this week are the CME CF Ether-Dollar Reference Rate, which sets a daily price at 4 PM London Time, and the CME CF Ether-Dollar Real-Time Index. Both indexes calculate their rates based on transaction data from Kraken and Bitstamp, two of the larger cryptocurrency exchanges.
While CME’s bitcoin futures were slow to start, they spiked last month to a record high of over 10,000 contracts. The volume at the start of this week was about 5,000 contracts, or one tenth of the WTI crude futures volume.
Ethereum futures may help increase the attention paid to cryptocurrency-based futures, but it could be a while until we see them anywhere, not just on CME.
Ethereum is “something that a few exchanges have expressed interest in listing derivatives on,” Brian Quintenz, a commissioner of the Commodity Futures Trading Commission, said Monday at the Consensus cryptocurrency conference. “The decision needs to be made carefully.”
