Wall Street Senior Analyst Tom Lee Says ETH Futures Could be Bad For Ethereum, But Good For Bitcoin

In his recent talk with Business Insider, Tom Lee, senior analyst at Wall Street said that the arrival of the ETH futures could be a bad sign for the digital currency, but instead prove to be good for Bitcoin. Last week, a report suggested the possible arrival of Ethereum Futures contracts by the end of this year, launched by Chicago Boards Options Exchange (CBOE).

While speaking to the publication, Lee said that this move won’t benefit Ether tokens as investors who are bearish on it will be given a chance of betting against it. Lee said that just as the euphoria of Bitcoin futures arrival helped it to surge to its all-time high of $20,000, similarly the futures contracts have also contributed to its fall so far this year.

Lee, in fact, blames the futures market for the drastic fall in the Bitcoin prices as data points that Bitcoin price collapsed during the expiry of the CBOE bitcoin futures. However. Lee states that even though Ethereum futures can prove to be not so good for the Ether tokens, they can still benefit Bitcoin in some way.

ETH futures will set an alternative option for crypto traders to short thereby releasing some of the pressure from Bitcoin, in turn, resulting into its price rise.

Lee said: “Since December of this year, if one was bearish on any aspect of crypto but did not want to own the underlying, they could short btc. They can now short eth, means the net short on btc in futures would fall.”

Just like the Bitcoin futures contracts, CBOE will base its ETH futures on the Gemini cryptocurrency exchange, founded by the famous Winklevoss twins. To bring the ETH futures to the market, CBOE has to undergo a regulatory screening by Commodity Futures Trading Commission (CFTC) that looks after the trading of derivatives and futures products. Moreover, SEC’s decision that Bitcoin and Ethereum are not securities could give CBOE the advantage of launching an Ethereum product in the derivatives market.

CBOE Global Markets president Chris Concannon then said, “This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”

This weekend, in the crypto market recovery, Bitcoin price surged to over $7,200 bring a fresh hope among investors after continuous sideways movement in the last few weeks.