Bitcoin and Ethereum are exploding higher once again. BTC is at new all-time highs at $20,800 as ETH pushes to new year-to-date highs at $635.
The rally coincided with news that the CME, the world’s leading derivatives and commodities exchange, has begun work on Ethereum futures contracts. While it cannot be 100 percent ascertained if this rally is a byproduct of this news, BTC exploded higher on the day the CME announced its Bitcoin futures contract.
What makes this interesting is that on the day the CME actually launched those contracts, BTC peaked.
Some fear that something similar may happen with Ethereum and its CME futures contracts.
But according to a leading analyst, this is not the case.
Ethereum to get futures contract on CME, but how will it affect ETH?
“People mostly remember how bitcoin hit its top on 2017 the exact day the CME $BTC futures launched, and proceeded to crash right after. They forget that the CME launch drove price from 6K to 20K, +225% in 2.5 months. The launch of CME $ETH futures is extremely bullish.”
As institutions have begun to enter the Bitcoin space, the CME futures have become a meaningful way for this class of investors to acquire exposure to this space.
Namely, Paul Tudor Jones, the billionaire Wall Street investor, acquired hundreds of millions of dollars worth of exposure to BTC via these futures.
An Ethereum market would allow investors to acquire exposure like this as well, boosting the investability of ETH.
People mostly remember how bitcoin hit its top on 2017 the exact day the CME $BTC futures launched, and proceeded to crash right after. They forget that the CME launch drove price from 6K to 20K, +225% in 2.5 months. The launch of CME $ETH futures is extremely bullish. pic.twitter.com/QFrG0TLhau
— Alex Krüger (@krugermacro) December 16, 2020
Institutions want in on Ethereum
Cementing the positive effect this new market should have on Ethereum, there is evidence suggesting that investors want in on Ethereum.
“Over the course of 2020 we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only. There’s a growing conviction around Ethereum as an asset class.”
Earlier this month, Tudor Jones, the aforementioned Wall Street billionaire, said that he thinks there is a chance Ethereum could become the industrial cryptocurrency while Bitcoin maintains its role as a reserve asset for the space.
As DeFi yields remain high, too, institutions should begin to enter the Ethereum space to capture returns for their investors.
The post While Bitcoin topped when the CME released BTC futures, Ethereum futures are bullish appeared first on CryptoSlate.