CME Group Moving Forward with Research into Ethereum Futures
The CME Group, one of the largest derivatives exchanges and one of the first to offer bitcoin futures as a trading option, has now moved to start pursuing an Ethereum futures product as well and will eventually have it listed on their exchange. The exchange made the announcement early Monday morning that they had met with top cryptocurrency exchanges to form an Ether Reference Rate and Ether Real-Time Index, both of which will act as the basis for the Ether futures contracts.
The time index and the price chart will help investors track the progress of Ethereum through a standardized system that can be relied on for objective and accurate price data, specifically between the Ethereum to USD pairs. Tim McCourt, the managing director at CME Group stated that:
“The Ether Reference Rate and Real-Time Index are designed to meet the evolving needs of this marketplace. Providing price transparency and a credible price reference source is a key development for users of Ethereum.”
One of the things institutional investors have been hesitant about when faced with a decision to enter the cryptocurrency space is the lack of concrete and objective information that you can be sure is accurate and up to date. Coins trade at slightly different prices depending on the exchange you are trading them through, which creates a price profile that is not entirely standard across the world. The newly proposed price index will aggregate the data from several exchanges that operate internationally to provide the average price points across the entire market.
This decision by the CME Group to pursue an Ethereum futures contract is another good sign that institutional investors are getting more interested in the cryptocurrency space. They are seeing the opportunity to invest in the success of the market overall instead of holding the actual coins is a less risky method of interacting with this developing and still rather volatile industry.