The world’s largest financial derivatives exchange, CME Group, announced its plans to launch an Ethereum Futures product in 2021.
According to a blog post released on December 16, derivatives contracts for the greatest smart contract ecosystem will be available starting from February 8, 2021.
Will history repeat itself? After all, the CME Group is notorious for launching new crypto products at the height of a bull cycle.
Institutional investors are finally here. In 2020, corporations and investment funds are interested in the world of cryptocurrency more than ever.
Now that Ethereum is posed to create a blockchain network for smart contracts that is truly scalable, leading derivatives exchange CME Group plans to launch a Futures product for Ether.
The product is yet to be approved by regulatory agencies within the United States. If they pass the product, we may see an institutional-grade futures product for ETH by February next year.
CME Group has already released details of the contracts, which reveal cash-made settlements. Each Ether contract within the futures product will be equal to 50 ETH.
According to the financial company, institutional investors have access to many key benefits by engaging with the ETH contract. First, they have efficient ether exposure which is easily manageable through the contract. Aside from that, CME Group also lists price discovery, a robust underlying index, and capital efficiency in crypto-trading.
Did Ethereum 2.0 spark institutional interest?
As Bitcoin explosively passed by $20,000 and reached a new ATH in the midst of December, investors have finally confirmed a bullish future for 2021. At the same time, we have seen Ethereum developers make the very first steps towards launching Ethereum 2.0.
As Defiye previously reported, the new Proof-of-Stake blockchain network will revolutionize the existing smart contract ecosystem.
If successful, the developers will solve the famous blockchain trilemma, which implies that blockchain networks can retain only 2 out of their 3 main features.
Decentralization, security, and scalability are the three major features that every network should have. However, networks only managed to possess two features at any time. If a team planned to create a scalable network, it would have to sacrifice decentralization. Likewise, if developers wanted decentralization then scalability becomes unreachable.
With Ethereum 2.0, crypto enthusiasts can enjoy access to all three features. The decentralized network will make transactions faster and scalable with the network. At the same time, Ethereum will also remain secure.
With that in mind, institutional investors may have an interest in finally joining the crypto market now that it has revolutionary blockchain networks.
CME Group may ‘break’ Crypto with Ethereum Futures product
But will history repeat itself for yet another time? As a reminder, the CME Group launched a Bitcoin futures contract at the height of a bull market in 2017. Within only weeks, the price began to collapse.
In January 2020, the derivatives exchange also launched an options contract for Bitcoin futures. After only a month, the price has once again slowed down before it finally collapsed in March.
Apart from the CME Group, there is also the event in which ICE’s Bakkt launched a Bitcoin futures product in September 2019. Even in this case, the launch of an institutional crypto product has slowed down the market.
Are these coincidences or not? If so, then Bitcoin’s bull run may not come to an end in February next year. But if these events pose no coincidence, then history may once again repeat itself.