Today’s biggest Ethereum news doesn’t even have Ethereum in the headline. It read: “CME’s Bitcoin Futures Likely to Start Trading December 11” and was published yesterday on CoinDesk.
The article was later corrected to specify that CME Group Inc (NASDAQ: CME) accidentally published December 11 as the official start date, when in fact they have not chosen a deadline.
They amended their statement to read: “Effective Q4 2017, and pending all relevant regulatory review periods, please be advised that CME will launch bitcoin futures.” [Emphasis Added]
Regardless of the official date, this is major news for the cryptocurrency world. By carrying Bitcoin in its derivatives market, CME is converting cryptos into a legitimate asset class.
That said, we have no idea if the Bitcoin futures market will work. It is an experiment. We have never seen Bitcoin contracts leveraged and shorted by Wall Street-sized money. So this is a major, major test for the entire crypto market.
If it works, which is to say that Wall Street can handle the risk, we expect CME clients to start asking for similar contracts on Ethereum, Litecoin, and several other altcoins.
What’s Going on with Ethereum Prices?
On Tuesday morning, the Ethereum to USD exchange rate rose 2.94%, from $357.95 to $368.47. At the same time, the Ethereum to Bitcoin rate grew 1.21% to 0.04470030 BTC.
Although those gains are moderate (at best), it’s important to understand that Ethereum was stuck around $300.00 for several weeks. It’s only in the last week or so that ETH developed some momentum to the upside.
Daily Ethereum Chart
How Active Are Investors?
On November 20, investors swapped $807.03 million’s worth of Ethereum tokens. Liquidity was fairly strong, though it did reflect a 31.7% decrease from the day before. That said, trading volumes had bounced back by the time this article went to press.
The 24-hour trading volume was $1.06 billion, at the time of writing.
Where Is ETH Demand Coming From?
When I say that Ethereum is second only to Bitcoin, I mean that in more ways than market cap.
For example, Ethereum’s trading base is extremely broad, which means that it is more insulated from political risk than other altcoins. (ie. Ripple often has +70% of demand from South Korea.)
At the moment, a South Korean exchange called Bithumb accounts for 10.9% of all Ethereum trades. But it comes in second to Bitfinex, which accounts for 11.14% of all trades.
Unlike these two leaders, all other exchanges are in the single digits. This level of dispersion, coupled with high trading volumes, is generally seen as a positive aspect of the Ethereum market.
As predicted, Ethereum prices are approaching the $400.00 level. We expect this to happen before the end of the year. Beyond that point, we maintain our Ethereum price forecast of $1,000 by the end of 2018.
Source: Price Confidential