By Brad Rosen, J.D.
The CME Group launched its Ether futures contract on February 8, 2021 just as prices in cash markets have been rocketing to all time highs. Ether in the spot market is trading around $1,700 as of press time after seeing a 28 percent jump in price in the prior seven-day period. The cash market price for Ether went as high as $1756.51, according to the widely followed coinmarketcap.com website, before pulling back some.
An expanding crypto-derivative portfolio. According the CME’s release, the introduction of the Ether futures contract represents an expansion of the exchange’s crypto derivatives offerings in this emerging asset class. Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products, stated, "As institutional demand for transparent, exchange-listed crypto derivatives continues to increase, we are pleased to launch our new Ether futures contract." He added, "The addition of Ether, along with our liquid Bitcoin futures and options, will create new opportunities for a broad array of clients, whether they are looking to hedge ether positions in the spot market or gain exposure to this cryptocurrency on a regulated derivatives marketplace."
Contract details. CME Ether futures trade under the symbol ETH and each contract represents 50 Ether units. The futures contracts are cash-settled, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of Ether. More information on the contract can be found here.
Growing investor interest and a maturing asset class. Michael Sonnenshein, CEO of Grayscale Investments, a firm involved in digital currency investing, proclaimed, "The launch of CME Ether futures is an exciting addition to the digital assets ecosystem as it evidences the ongoing maturation of the asset class as a whole." Sonnenshein also noted, "At Grayscale Investments, we've seen enormous growth in investor interest for Ethereum and we're excited to see the growing list of financial product offerings expanding access to digital currencies."