An ETH futures contract is expected to be approved by the US Commodity Futures Trading Commission (CFTC), provided that it fulfils some basic requirements, according to a senior official of the federal regulator.
Previously, CFTC approved the launch of bitcoin futures contracts, thus allowing Cboe Global Exchange and CME Group to offer cash-settled contracts. According to the official, CFTC will be open to approve a similar product for Ethereum’s native cryptocurrency.
The regulator has a policy to refrain from publicizing its decisions to adopt new products, therefore the official’s identity was not revealed. He stated that he believes that an Ether derivative under CFTC’s jurisdiction is possible. However, the regulator can respond only once the company submits its proposal.
In case a regulated futures product is approved, it will allow broad institutional investment to come into the Ether market.
A cash-settled futures contract can be paid out in fiat currency instead of crypto, which means that those funds that are not allowed to buy the digital currency will “gain exposure to Ether” without worrying about custody, maintained John Todaro, Tradeblock’s director of digital currency research. Moreover, other regulators such as SEC (Securities and Exchange Commission) will gain confidence and may pave the way for an ETF (exchange-traded fund), which in turn can bring more liquidity to Ether. Finally, due to institutional investment retail investors will also be attracted toward it.
Previously, in the case of Bitcoin futures, the market showed a positive response, and CME and Cboe’s Bitcoin futures contributed to the digital asset’s all-time high price of USD 20,000. However, some experts believe that introduction of futures actually hurt Bitcoin’s price in the long run.
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