At press time, the second-largest cryptocurrency and primary competitor to bitcoin has enjoyed a $20 rise from our last price article, and is now trading for roughly $518. As bitcoin has incurred a $200 rise over the last 24 hours, it’s probably safe to say that the effects of last week are wearing off, and major cryptocurrencies are once again crawling towards the green, though it’s unclear how long present trends will last.
One of the big questions rolling through the crypto arena right now is whether futures are doing more harm than good. Fundstrat’s Tom Lee, for example, states that the bitcoin price correlates directly with activity surrounding bitcoin futures; that the price rose to nearly $20,000 in December around the same time they were introduced, and when those with CBOE expired last week, the currency dipped to its lowest mark since February.
Now, the Commodity Futures Trading Commission (CFTC) has subpoenaed four primary cryptocurrency exchanges – itBit, Kraken, Coinbase and Bitstamp – to garner trading data regarding bitcoin futures and see if any manipulative trading might have occurred to negatively affect the currency’s price.
Now, CBOE is examining the idea of Ethereum futures, and one can’t help but wonder if this is a mistake. When the contracts expire, will Ethereum’s price drizzle along with them? Just because Securities and Exchange Commission (SEC) director William Hinman suggests that Ethereum is not a security shouldn’t subject it to unending experimentation.
CBOE president Chris Concannon explains, “We have been contemplating futures on Ethereum for some time. This [SEC decision] clearly makes the complexity of ether potentially being a security finally go away, and it certainly clears a path for launching a future on ether.”
Now, Concannon says the company is moving forward with its plans for Ethereum futures, and its partnership with the Gemini Exchange in New York could potentially bring these plans to full fruition.
“This partnership was structured to allow us to roll out additional products on other currencies, and literally use the same structure as bitcoin futures,” Concannon states. “So, we don’t have to do anything unique. It just follows in the same footsteps as the bitcoin futures.”
In addition, the latest initial coin offering (ICO) – called Cyclean – has chosen Ethereum as the blockchain of its operations. Executives claim Ethereum provides the safest route for its plans. They also claim to know and trust Vitalik Buterin, the coin’s co-founder, and say he’s one of the smartest men working in the cryptocurrency industry.
Finally, they believe Ethereum provides a level of ease like no other, and one can create a contract on the blockchain without necessitating a third-party. Representatives state that Cyclean will be able to improve as Ethereum improves (we are still awaiting the release of the Casper-Sharding update), and that Ethereum could be a leader in the blockchain revolution.
With so much trust going in and out of Ethereum, one only hopes that any correlation with futures doesn’t bear negative effects like they’ve done with bitcoin, and investors can stay put without incurring serious losses.
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