Following in the path of bitcoin futures, launched by U.K.-based Crypto Facilities in 2015, and XRP futures, launched in 2016, the company, which is regulated by the Financial Conduct Authority (FCA) in the U.K., will start trading Ethereum futures. But this early batch of Ethereum futures has a potential impact beyond just Crypto Facilities, which is backed by Digital Currency Group, String Ventures and more. The startup also provided support to the CME Group commodities exchange when it launched its own bitcoin futures last year.
As a number of exchanges including Cboe engage in cryptocurrency futures, trading Ethereum futures shows the increasingly mature state of digital assets, according to Timo Schlaefer, founder and CEO of Crypto Facilities.
“Bitcoin has gone through a process of maturation as a financial asset with a futures market in the past year,” he said. “And Ethereum is following a similar path this year.”
Chicago-based Akuna Capital will provide liquidity for the Crypto Facilities Ethereum futures product and is looking forward to seeing this much-needed product fill a gap in the market. Toby Allen, the head of digital assets at Akuna Capital, explained the importance of the new investment vehicle in a statement: “The addition of a futures product enables crypto traders to take both long and short positions in ETH and is another giant leap in the development of the crypto asset class.”
In March, Ethereum startup incubator ConsenSys announced a partnership with TrueDigital to develop a benchmark price for the ether cryptocurrency, in a possible step toward creating its own futures. While the price of ether dropped 2% recently, it is up over the past year from $88 last May to over $700 today. This in spite of some regulatory uncertainty as to whether Ethereum might actually qualify as a security is some jurisdictions.
Whether Ethereum is a security is a matter for different jurisdictions to decide. Crypto Facilities is a derivatives platform and complies with the applicable regulation.