How Will a CFTC Approved Ethereum Futures Contract Impact the Market?
With a CFTC insider now saying that an Ethereum futures contract could receive approval from regulators if certain requirements are met, how would such an approval impact the broader cryptocurrency market?
“I think we can get comfortable with an ether derivative being under our jurisdiction,” a CTFC official told Coindesk. “A derivatives exchange comes to us and says ‘we want to launch this particular product.’ If they came to us with a particular derivative that met our requirements, I think that there’s a good chance that it would be [allowed to be] self-certified by us.”
The insider's words come after the CFTC published a “Request for Input” looking for industry and market input on the risks and use cases for Ether last December.
What Does The Past Tell Us?
Some suspect that the launch of the CME and CBOE’s bitcoin future contracts may have contributed to the sharp decline from BTC's all-time high in late 2017.
"The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence," researchers from the San Francisco Federal Reserve wrote in May, 2018. "It is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”
Our Take On This
Watch Lead Technical Analyst at Cracking Cryptocurrency, Justin Wise, break down the latest report on a CFTC approved Ether futures contract and its potential affect on the market.