First Ethereum Futures: Effects on the price?

Crypto Facilities, a UK-based company, is the first crypto platform to introduce regulated Ethereum futures contracts. The new Ethereum futures contracts represent a further step towards maturation of the crypto market, as complex financial products such as index funds and crypto ETFs are emerging.

In an announcement published on Friday, Crypto Facilities explained that the Ethereum Futures contract would “bring more efficiency and liquidity to the crypto markets”, allowing market participants to place long or short positions on Ethereum, expand investment opportunities and support risk management.

Ethereum futures are LIVE

Crypto Facilities’ new Ethereum futures extend the platform’s portfolio, which includes both Bitcoin and Ripple futures. Timo Schlaefer, CEO of Crypto Facilities, commented on the launch:

“ETHER IS THE SECOND MOST LIQUID CRYPTO CURRENCY AFTER BITCOIN, WHICH TRADES BILLIONS EVERY DAY, AND WE ARE PLEASED TO PLACE ETH FUTURES. THE ETHEREUM NETWORK IS THE OUTSTANDING BLOCKCHAIN FOR INTELLIGENT CONTRACTS AND WE BELIEVE THAT THIS NEW TRADING INSTRUMENT WILL ATTRACT MORE INVESTORS AND BRING MORE LIQUIDITY TO THE MARKET”.

Crypto Facilities will merge with liquidity providers BC2C and Akuna Capital to support the Ethereum futures contracts. Toby Allen, Head of Digital Assets at Akuna Capital, stressed the importance of Ethereum Futures as the crypto market matures:

“THE LAUNCH OF A FUTURES PRODUCT ENABLES CRYPTO TRADERS TO TRADE BOTH LONG AND SHORT POSITIONS AT ETH AND IS ANOTHER MAJOR STEP IN THE DEVELOPMENT OF THE CRYPTO ASSET CLASS.

Crypto Facilities is no stranger to the crypto futures market – the company is currently working with the Chicago Mercantile Exchange to establish the CME CF Bitcoin Reference Rate, which is essential for operating bitcoin futures.

How do futures affect prices?

The potential impact of futures on the price of Ethereum should not be underestimated – the introduction of bitcoin futures on December 17 had a significant impact on bitcoin. A study by the Federal Reserve Bank of San Francisco identifies the introduction of bitcoin futures in December 2017 as a mechanism by which pessimists could enter the market, which was previously not possible due to unilateral speculative demand. Futures contracts also have the advantage that traditional investors can enter the market and a lot of capital could flow into Ethereum. However, one should be aware that futures contracts will have an even stronger influence on the price.