Investing in Ethereum
(ETH) Futures could soon be a possibility after CBOE’s recent announcement stating that Ethereum (ETH) is not a security and that they have been mulling over ETH Futures for a while now. Ethereum (ETH) is the second largest coin by market cap and the largest cryptocurrency to offer a platform for Dapps development while also being a parent to more than half the blockchain projects in the market as of now. Given the current outlook of the market, if ETH Futures are introduced, the price is more likely to head only one way, and that is up.
Considering the growing number of investors
who are willing to take a little more risk in pursuit of higher gains, it is plausible to assume that the price rise will be an aggressive one, one that could push the market cap of Ethereum (ETH) in the trillion dollars territory. This is to be expected when institutional money gets involved in the form of ETH Futures or more interestingly, an Ethereum ETF. Both of these developments have the potential to put Ethereum (ETH) on the global pedestal as a leader in the smart contracts and Dapp development industry.
Recent experience with Bitcoin
(BTC) Futures and extensive media coverage about how Bitcoin (BTC) Futures could have been responsible to suppress the price of Bitcoin (BTC) has made a lot of new investors in the crypto community to classify Futures as an obstacle to the development and growth of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Logically speaking, that is not the case. It is easy to make connections between Bitcoin (BTC) and the expiry of CME and CBOE futures contracts to argue that the price came down when the futures expired on a particular day.
That may be true and those futures contracts may have paid off for many but the thing is, it would have happened regardless. The price had spiked after parabolic growth and everyone was talking about the tulip mania. It was natural to assume that a correction was in order. Even if futures did not exist, market makers would have still dumped their Bitcoin (BTC) at the top and bought back cheaper at current levels. Futures just provided them an extra way to earn more and had nothing to do with their intent to take profit by dumping their Bitcoin (BTC). The same applies to Ethereum (ETH) Futures.
A positive and powerful aspect of futures that most new investors ignore is their potential to bring more big investors in risky but lucrative markets like these. Ethereum Futures would provide large scale investors the opportunity to invest in Ethereum (ETH) without having to worry about storage. It is no different than Oil or Gold. Many investors would like to trade Oil or Gold but very few of them like to store it by themselves. The same is true for cryptocurrencies like Ethereum (ETH). The option to buy Etheruem Futures contracts would attract institutional investors in the game who can buy Ethereum (ETH) on behalf of their clients without having to worry about storage issues or hiring technical experts. Ethereum (ETH) is currently trading above the 50MA against Bitcoin (BTC) and is expected to make big movements in the weeks ahead.