CME states that the new contract will be cash-settled, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of Ether.
Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products, said that based on demand and growth of their Bitcoin futures and options, they believe Ether futures will be a valuable tool for their clients interesting in trading or hedging crypto.
“Ethereum is the second-largest cryptocurrency by both market capitalization and daily volume. The introduction of listed Ether futures to our time-tested, regulated CME Group derivatives marketplace will help to create a forward curve so Ethereum market participants can better manage price risk.”
Ether futures will join CME Group’s Bitcoin futures and options. CME group noted that as Bitcoin futures approach their third anniversary on Dec. 17, there has been significant growth in their adoption from a broad array of participants, including institutional investors.
Year to date 2020, CME Group reports that 8,560 Bitcoin futures contracts (equivalent to about 42,800 bitcoin) have traded on average each day. At the same time, institutional interest continues to build with the number of large open interest holders reaching a record of 110 in December.