All this week, a dark cloud hung over cryptocurrency markets. It was caused by the first batch of Bitcoin futures contracts coming due…and investors having no idea what to expect from the fallout.
But then the contract was settled. The world continued spinning on its axis, and the sun still rose in the east. Nothing much had changed. (Source: “Milestone: Cboe’s First Bitcoin Futures Contract Expired Today,” CoinDesk, January 17, 2018.)
As a result, investors returned to the bullish optimism that preceded their panic. ETH prices appreciated 20.19% against the U.S. dollar, bringing the Ethereum to USD exchange rate to $1,066.04.
While it’s tempting to look back at the panic and laugh, investors should understand why this was such a big deal.
The end goal is for cryptos to achieve full integration into global capital markets, meaning that anyone and everyone can invest in them, including giant institutional investors and hedge funds.
But in order to get there, cryptos need to satisfy concerns voiced by the Commodity Futures Trading Commission (CFTC). Among the Commission’s demands is the creation of a stable derivatives market. Only then will they consider approving a crypto exchange-traded fund.
See the connection now?
If Bitcoin futures had failed to settle properly, no one would dare create parallel markets for Ethereum, Litecoin, or Ripple. This would, in turn, derail the dream of full integration and set crypto markets back a year, at least.
Ethereum Price Chart
But that nightmare scenario did not come to pass. Things did go smoothly. The F8 contracts on the Chicago Board Options Exchange (CBOE) closed without any fuss, prompting the CEO of the exchange to hint at future products around altcoins.
In other words, today was a very good day for cryptocurrencies.
Analyst Take
Ethereum is the second-biggest crypto in the world. I imagine this puts it next in line for a derivatives market, though that is purely speculation on my part. If I’m right, however, and we do see the creation of an Ethereum futures contract in the coming weeks, then ETH prices could explode to the upside.
As such, we maintain our $1,500 Ethereum price forecast for 2018.
Source: Price Confidential