The Chicago Mercantile Exchange (CME) Group announced Wednesday that it would launch futures contracts for ether (ETH), the second-largest cryptocurrency by market cap.
Futures contracts are derivative products that mandate the involved parties to buy and sell a specified quantity of an asset at a chosen date and for a given price. It provides an avenue for investors to hedge volatility and remains a key component of financial markets.
“Building on the success of bitcoin futures and options, CME Group will add ether futures to the cryptocurrency risk-management solutions available to trade in February,” the exchange said in an official announcement today.
The ether futures contracts will go live on February 8 and open to trade between Sunday and Friday from 5:00 p.m. to 4:00 p.m CT. Each contract will consist of 50 units of Ether with UK-based CF Benchmarks to provide the ETH/USD rate.
Worth noting is that although almost certain to launch, the Ether futures contract offering by CME Group is still subject to regulatory approval.
The addition of ETH to the trading venue comes roughly three years after CME introduced bitcoin futures and marks another step to mainstream adoption for the cryptocurrency market.
When CME introduced its Bitcoin futures product in 2017, Bitcoin was at the brink of its previous all-time high, just under $19,800.Coincidentally, today’s announcement comes after Bitcoin breached the $20,000 mark for the first time in its history.
While Bitcoin traded above $20,700 at the time of writing, ETH, the asset being listed on CME, has also seen a significant rally back above $600 on the day. But the second-largest asset is still more than 50% of its previous all-time high in 2017.
Observers would expect that the recent launch of Ethereum 2.0, the upcoming CME listing, and the crypto market’s general state would propel ETH to the threshold of its 2017 numbers. ETH currently trades at $621 and has a $70.7 billion market cap.