TrueEx and ConsenSys Wants to Bring Ether to the Institutional Trading Space
Ether - The native cryptocurrency of the Ethereum blockchain network is currently the second largest digital assets after Bitcoin in terms of market cap. The demand for Ether has increased exponentially in the last three months, especially after crypto investors started shifting away from Bitcoin owing to huge congestion, increased transaction costs and slow transaction speeds.
It now seems that Ether is now all set to enter the institutional trading space very soon. New York-based blockchain application startup ConsenSys and TrueDigital Holdings (TDH) - a new affiliate of TrueEx have joined hands to develop a benchmark price for Ether and lure institutional investors willing to join the crypto space.
The announcement came from TrueEx via a press release on March 12, where the company says that “The initial contracts will be for bitcoin non-deliverable forwards (NDFs) settled in USD and will be listed under the "trueDigital" brand on the existing trueEX swap execution platform.” The contracts are still pending review and approval from the U.S Commodity Futures Trading Commission (CFTC).
In December last year, the CFTC already approved launching of Bitcoin Futures Contracts to CME and CBOE groups.
The two firms - ConsenSys and TrueEx are also looking forward to creating a target reference index for the price of Ether tokens as an initial step towards making more cryptocurrency products available to institutional investors.
While commenting on this new development, Sunil Hirani, the founder of TDH said "Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities, but the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets.”
The plans are currently in the nascent stage of development but if they are implemented, it is expected to trigger a large-scale adoption among institutional investors. As a result, several financial institutions are expected to start supporting the growing interests in digital currencies along with their inclusion as an asset class in different investment products.
Ever since the start of 2018, the crypto markets have experienced a slow down as global regulatory bodies have been juggling with several measures in order to protect the interest of the investors. As a result of the increased scrutiny, many crypto enthusiasts have preferred to cautiously invest in the markets, unlike the huge inrush which was seen till mid-December 2017.
As institutional investors are expected to step in this market, it might further trigger the interest of other retail investors causing more cash inflow in the crypto space.