ETH futures contracts from the CME Group formally launched yesterday, and trading is already off to a big start.
Ethereum futures from Chicago Mercantile Exchange (CME) Group have finally arrived, and trading is off to a fresh start, with over $30 million in futures contracts traded in the first 24 hours after its launch.
CME ETH futures launched yesterday, February 9, adding the second-largest crypto by market capitalization to the world’s biggest and oldest futures exchange group, joining Bitcoin in an exclusive club of digital assets with foundations strong enough to find a place in traditional futures markets.
CME added Bitcoin futures in December 2017, the similar week BTC prices hit a previous bull run all-time high just about $20,000. Now, Ethereum futures are open for trading, with February and March futures trading at $1,769 and $1,804, respectively.
Futures contracts indicate obligations to buy or sell an asset at a given price on a predetermined future date and can be bought and sold like stock and other market-traded assets. It will allow individuals or companies to bet that the market price will be higher or lower than the contract price at execution, permitting them to profit from the difference.
Futures contracts are also normally used as hedging instruments; if a business knows that they need to buy a particular amount of Ethereum at a given date, futures contracts are a good war to lock in a known price beforehand.
CME Ethereum and Bitcoin Futures are cash-settled instruments, this means that the difference between spot prices and executed prices are paid in cash, instead of any actual crypto changing hands.
On the first day of ETH trading, contract issuers have generated around $20 million in open interest, a measure of contracts available to be bought and sold. Total volume reached over $30 million as traders got their feet wet while buying and selling ETH futures to try to determine the appropriate pricing.
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