Although the cryptocurrency market is still drastically lower than it was at the time of Bitcoin’s $20,000 peak, BTC futures volume on the Chicago Mercantile Exchange (CME) has continued to establish new highs over recent months.
In other words, contrary to popular belief, futures vehicles have become an integral facet of crypto trading. The U.S. Commodity Futures Trading Commission (CFTC), who oversees this aspect of this embryonic market, has picked up on this trend, with an insider to the agency revealing that it may soon approve Ethereum (ETH/Ether) futures.
CFTC Is Amicable Towards Ether Futures
Per an exclusive report from CoinDesk, which cites a “senior official” that has knowledge of the CFTC, the financial regulator is entirely amicable towards Ethereum. He/she explained that “we can get comfortable with an Ether derivative being under our jurisdiction,” confirming the hearsay that the CFTC’s cousin, the Securities and Exchange Commission (SEC), sees ETH as a non-security.
This news comes after the CFTC issued a “Request for Input” (RFI) in December, which was when BTC was trading at a mere $3,150.
Since the issuance of the RFI, the agency has received a number of comments, a purported 35, from key industry stakeholders, like Coinbase, Circle, and even Craig Wright. Although all the comments weren’t exactly positive, what the CFTC was looking for was the “range of issues that might exist,” and how it should address said problems when collaborating with the industry, like if it was to approve an Ethereum-based product.
This all isn’t to say that the folks over at the CME or its primary competitor, the Chicago Board Options Exchange (CBOE), are interested in supporting Ethereum. In fact, in the middle of 2018, Terry Duffy, the chief executive of the CME Group, told Bloomberg that his firm’s reputation is on the line when it gets involved in cryptocurrency, thus making illogical to rush into listing products for BTC or other digital assets, Ether included. However, considering that CME has seen monumental levels of interest for its Bitcoin product, launching a similar vehicle for the second most popular digital asset seems like a logical next step.
Aside from the CME, ErisX, a more crypto-native startup headed by notable Wall Street veteran Thomas Chippas, also seems somewhat interested in a futures contract based on Ethereum. In a comment issued to the CFTC in February, Chippas wrote that Ethereum futures on regulated markets would be consistent with the CFTC’s M.O. of facilitating “open, transparent, competitive, and financially sound derivative trading markets [and] to prohibit fraud, manipulation, and abusive practices in connection with derivatives and other products subject to the [Commodity Exchange Act] CEA.”
Seemingly as a result of the CoinDesk article, the value of ETH has spiked. As of the time of writing this, ETH has found itself up by 10.4% to trade at $180 — 2019’s high so far — while most other cryptocurrencies have posted gains of a mere percent or two.
A Positive String Of Ethereum Developments
No matter if Ether futures come to fruition in the near future or not, the recent quote adds to the string of positive developments that Ethereum has recently seen.
Just last week, a group of Ethereum core developers revealed that the blockchain’s transition to Proof of Stake (PoS) in a series of upgrades dubbed “Serenity” is well on its way. Justin Drake of the Ethereum Foundation remarked that code specifications for phase zero of Serenity are “on track” to see finalization by June 30th. Once finalization occurs, developers can begin building code around said specifications, as they ensure that everyone is on the same page. Drake elaborates:
“We’re still very much on track. Still, [code] simplifications are coming through which is great and the process of fine combing is also for finding final bugs.”
For those unaware, phase zero, also dubbed “Beacon Chain,” will allow for validators, rather than miners, stake Ether and vote on improvement proposals.
This all comes as Ethereum, or private chains based on the technology at least, have begun to gain traction in the mainstream, especially with big-name corporations. For instance, in late-April, rumors revealed that Samsung, one of the world’s largest technology shops, has intentions to build an Ethereum-based blockchain that will host its own token. It isn’t clear what use this asset would hold, but the source suggests that blockchain could be brought to Samsung Pay, the tech giant’s fintech application.