ETH Price Moves Past $1650 As CME Ether Futures Go Live, Bitcoin Plays A Catch-up

On Sunday, February 7, Ethereum ETH was under pressure as the price slipped below $1600 levels following its new all-time high above $1750 levels just two days before. However, ETH investors have swung back in action today as the ETH price moves past $1650 levels as the CME Ether Futures finally go live as per the scheduled date.

In a tweet yesterday, the derivatives exchange noted that its Ether futures will start trading by Sunday evening 6 PM E.T, however, the first trade shall happen today i.e. February 8. The CME Group announced about its Ether Futures for the first time in mid-December 2020.

As per the contract details that are published on the official CME website, the CME Ether Futures are completely cash-settled just like its Bitcoin counterpart launched in December 2017. Furthermore, the Ether Futures shall be based on the CME CF Ether-Dollar Reference Rate.

Each of the ETH futures monthly contract comprises of 50 ETH but with a minimum block trade size of five contracts. The official CME website also has a list of all the liquidity providers. Some of these are already the liquidity providers for CME’s Bitcoin futures and options products. Some of the big firms providing liquidity for CME Ether Futures are Galaxy, BlockFi, Genesis, CoinShares, and NYDIG.

The launch of CME Ether Futures will encourage other financial institutions to build their products and services to the mainstream. It will thus bring higher institutional participation in Ethereum thereby leading the digital currency to mainstream adoption.

Just as ETH continues to make new highs, the world’s largest cryptocurrency Bitcoin (BTC) is playing a catch up. On Saturday, BTC surged back above $41,000 levels, however, didn’t breach its previous all-time high. But forming a base at $38,000 on Sunday, BTC price has surged back once again above $39,400 levels.

At press time, BTC is trading at a price of $39,276 with a market cap of $731 billion. Last week, CME Group’s chief economist Bluford Putnam said Bitcoin is gaining edge over Gold as an inflation-hedge.

Speaking to Bloomberg, Putnam added: “Gold appears to have an emerging competitor in Bitcoin. Given the current price range for gold, it is likely that increased production will be a feature of 2021”.

“We’ve also noticed that gold may be losing its appeal as a hedge against global political risks. In the 2017 to 2020 period, the mostly ups and occasional downs of the gold price appear to be directly tied to Fed policy shifts more than anything else,” he added. “Since equities were responding to the same driving force, the gold-equity relationship tended to become a little more closely associated, weakening gold’s safe-haven appeal.”