Ethereum, traded through the digital token ether, and litecoin could be about to join bitcoin in the futures market after U.S. retail brokerage TD Ameritrade announced it is investing in new cryptocurrency exchange, ErisX.
TD Ameritrade’s 11 million clients are already able to trade bitcoin futures over the Chicago Board Options Exchange (CBOE) Futures Exchange after both the CME Group and CBOE introduced them in December last year.
The development could be a good sign for the ethereum price, which has struggled throughout 2017, falling more than 80% from its peak in January.
ErisX plans to launch spot trading in the first half of 2019, with physically settled futures to launch later next year.
“It could open up additional cryptocurrency products on the future and spot side that our clients could potentially trade,” J.B. Mackenzie, TD Ameritrade’s managing director of futures and foreign exchange, told Reuters.
“We continue to see our retail clients seeking access to trade digital currency products,” Mackenzie said, speaking this time to CNBC. “We wanted to find a platform that would be fully regulated, and something that has that capital markets feel.”
While many are excited to see how ethereum and litecoin futures affect the market, the introduction of futures trading has not been enough to stem bitcoin’s losses this year. Bitcoin is down some 60% from its highs at the end of 2017 as investors lose patience waiting on much anticipated institutional money to enter the market.
When the CBOE launched bitcoin futures trading back in December it attracted so much trading volume that the CBOE website temporarily went down — it seems unlikely ethereum and litecoin futures will generate the same level of interest.
Thomas Chippas, former head of global quantitative execution at Citi, has joined as chief executive of ErisX, which is part of traditional futures market Eris Exchange, and is the latest traditional banking executive to make the move to the blossoming cryptocurrency industry.
Meanwhile, it has emerged the sell-off of ethereum so far this year might not be due to investors backing out of smaller initial coin offerings (ICOs), as previously thought.
A report out this week suggests that among 200 of the biggest ICOs, on average, most projects have already converted what they had raised in crypto into fiat currency.
In August Bloomberg reported that ICOs using the ethereum blockchain could be to blame for its decline as some of those projects cash out to cover expenses and on fears this year’s cryptocurrency bear market will drag on.
According to Bitmex, the exchange which authored this latest report, the ethereum-hosted projects it examined collectively still hold 3.8 million ethereum, around one-quarter of the crypto total that they originally raised. Bitmex found the deficit between total ethereum raised and the total amount of ethereum cashed into fiat is just $11 million. Estimated unrealized ethereum gains — that is crypto raised that hasn’t been cashed out — stands at $93 million.