The Launch of Ethereum (ETH) Futures Still Waiting for the CFTC to Decide
Ever since the Securities and Exchange Commission announced their decision on the matter of Bitcoin and Ethereum, stating that the two cryptocurrencies are not securities but rather represent currencies, worried investors and crypto enthusiasts could finally take a break.
Months back, at the end of the last quarter of 2017 when the cryptocurrency market was heading towards reaching all-time highs, bringing major profit to cryptocurrency investors, Bitcoin (BTC) futures were launched by Chicago Board Options Exchange.
The futures first went out on Gemini, one of the most popular exchanges in the market, founded by Winklevoss brothers, and naturally, Ethereum holders expected that ETH will get to see the launch of Ethereum futures as well.
However, although SEC approved ETH as a currency, deciding that Ethereum is not a security, Commodities Futures Trading Commission (CFTC) decided that Ethereum still represents a questionable asset.
Despite the SEC’s verdict on the technical nature of Ethereum, CFTC doubt is postponing the launch of Ethereum futures that should also become available on Gemini.
In the meanwhile, Bitcoin futures have become available on Gemini through CBOE, Barchart, and CME Group.
CFTC to Looking for Feedback from Ethereum Team
Although CBOE was waiting for the approval to arrive from CFTC, so that the exchange could launch Ethereum futures by the end of October, the trading commission stated that they will base their decision after the feedback they are planning on getting from Ethereum team.
Before being able to regulate ETH, CFTC is looking to clarify the differences as well as similar characteristics between Bitcoin and Ethereum.
That is how the questions on the technical nature of Ethereum are asking for details on how Ethereum and Ether functionalities and technical capabilities are different from those in the Bitcoin system.
The team will also need to provide answers to how the underlying technology of Ethereum differentiates from the one found in BTC, explain the similarity between the governance of Ethereum and Bitcoin, as well as to describe how trading derivatives on Ethereum affects the network and its native cryptocurrency.
Although launching of Ethereum futures would allow more people to participate in the cryptocurrency market without actually investing in ETH, the launching of Ethereum futures won’t directly affect the price of Ethereum in the market.
Bitcoin futures are already providing a way for bidders to participate in the cryptocurrency market by bidding on the future price of Bitcoin without the need of actually buying Bitcoin units.
However, although futures can affect the cryptocurrency market through speculations, which is the way bidders make a profit with Bitcoin futures, the launch of the cryptocurrency-backed futures won’t be directly affecting the price of the given cryptocurrency.
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