CME Group may launch Ethereum futures this year, and Ethereum has multiple benefits

Author | Qin Xiaofeng

Editor | Lu Xiaoming

Produced | Odaily

Editor | Lu XiaomingannouncementProduced | Odaily

According to a report released by CME Group on Friday

announcement

, the group is adjusting benchmark interest rates and indices related to Ethereum, which are tentatively scheduled to be released on July 15.

According to people familiar with the matter, this may mean that CME will soon launch Ethereum futures trading.

However, the biggest challenge facing CME is how to reduce the volatility of Ethereum futures products. Since Ethereum has the same high volatility as Bitcoin, they had to improve the robustness of their index.

The strategy adopted by CME is the same as the strategy when it launched Bitcoin futures before, choosing multiple exchanges as data sources.

Without reliable data, cash settlements could be easily manipulated or simply not represent the actual price of the underlying asset, the sources said. “This is also a limitation of CME cash-settled futures – it always requires market data from the spot exchange.”

CME's announcement pointed out that the encryption exchange itBit meets the criteria for inclusion in the index, so it will provide data for CME together with Bitstamp and Kraken to form the Ethereum index.

itBit was established in 2013 and is currently a widely recognized bitcoin exchange in Singapore. In 2015, itBit obtained the trust company charter issued by the New York State Department of Financial Services, which made itBit the first bitcoin exchange to obtain this charter, thus becoming a bitcoin company subject to and regulated by the US banking law.

However, there is still a problem before CME, that is, whether the CFTC (U.S. Commodity Futures Commission) will pass the Ethereum futures application is still unknown.

Why is CME launching Ethereum futures trading?

First of all, Ethereum is currently the second largest cryptocurrency by market value, its volume and user base are second only to Ethereum, and it is more likely to be recognized by encrypted investors. Moreover, with the imminent implementation of Ethereum 2.0, the technical development of Ethereum will usher in new developments, and it has also attracted the attention of the encryption world.

Second, CME’s competitors, ErisX and LedgerX, are both preparing to launch Ethereum futures trading this year.

Additionally, CME’s own surge in crypto investors urgently requires a new investment outlet. According to the latest data from CME, the total number of CME customer registrations has increased by 30% this year, and futures trading is sought after by crypto investors.

What impact will the launch of CME's Ethereum futures trading have on the market? We can refer to the impact when CME launched Bitcoin futures.