According to a statement released last Friday by the CME Group, the group is adjusting its benchmark interest rates and indices related to Ethereum, which are tentatively scheduled to be released on July 15.
According to informed sources, this may mean that CME is about to launch Ethereum futures trading.
However, the biggest challenge facing CME is how to reduce the volatility of Ethereum futures products. Because Ethereum has the same volatility as Bitcoin, they must improve the robustness of their index.
As with the previous strategy of launching Bitcoin futures, CME's strategy was to select multiple exchanges as data sources.
According to the source, if there is no reliable data, the cash settlement is easy to manipulate or does not represent the actual price of the underlying asset at all. “This is also a limitation of CME cash settlement futures – it always requires market data for spot exchanges.”
The CME announcement states that the crypto exchange itBit meets the criteria for inclusion in the index and will therefore work with Bitstamp and Kraken to provide data for the CME to form the Ethereum Index.
ItBit was established in 2013 and is currently a more widely recognized bitcoin exchange in Singapore. In 2015, itBit received a charter of the trust company issued by the New York State Department of Financial Services, which made itBit the first bitcoin exchange to receive this charter, becoming a bitcoin company regulated and regulated by US banking law.
However, there is still a problem in front of the CME, that is, whether the CFTC (US Commodity Futures Commission) will apply through the Ethereum futures, it is still an unknown.
Why is CME going to launch Ethereum futures trading?
First of all, Ethereum is currently the second largest cryptocurrency market capitalization. Its volume and user base are second only to Ethereum, and it is more likely to be recognized by encrypted investors. Moreover, with the implementation of Ethereum 2.0, Ethereum's technological development will usher in new developments and be deeply concerned by the encrypted world.
Second, CME competitors ErisX and LedgerX are preparing to launch Ethereum futures trading this year.
In addition, the number of CME's own encryption investors has soared, and a new investment exit is urgently needed. According to the latest data from CME, the total number of CME customer registrations has increased by 30% this year, and futures trading is sought after by encrypted investors.
What is the impact of CME's Ethereum futures trading on the market? We can refer to the impact of CME's launch of Bitcoin futures.
On December 1, 2017, the CFTC approved the CME Bitcoin futures application. Affected by this news, Bitcoin rose 15% on the day and reached the highest historical price on the day the CME Bitcoin futures were launched.
Ethereum has a lot of good news recently. First, the beacon chain code has been locked. Second, the 2.0 line is available.
Once the CFTC approves CME's Ethereum futures application, it is definitely a great advantage for Ethereum prices. (Star Daily)