BTC Could Rise As A Result of Ethereum Futures
Even in a market downturn, development in this nascent industry rages, with firms continually releasing innovative products and services that could change the future of crypto. And as reported by Ethereum World News previously, the CBOE, the foremost US-based options exchange, is just months away from launching Ether futures that will be based on Gemini markets.
This news immediately sparked speculation about the effect this vehicle would have on the market, with many optimists noting that this futures contract should help to propel the price, development, and maturation of Ethereum, and subsequently, the growth of this industry.
While many agreed with this hope, Tom Lee, the head of research at Fundstrat Global Advisors, expects this news to benefit the price of Bitcoin (BTC) more than the price of Ethereum (ETH).
Speaking with Business Insider reporters, Lee, who has become well-known, if not near-infamous for his seemingly undying bullish sentiment on Bitcoin, noted that Ether futures will allow speculators to weigh down on the price of ETH.
His claims seem to be corroborated by the historical price action of Bitcoin following the initial CBOE and CME futures release. Since Bitcoin futures debuted in mid-December of last year, prices tanked, with Bitcoin briefly touching $ 20,000 before tumbling to $ 7,200 as it stands today. Some think that this is no unfortunate coincidence, but rather, the effect of short sellers placing bets against Bitcoin via the futures market.
As such, the Fundstrat Bitcoin bull then noted that the same effect, albeit likely not as drastic, could occur this time around as well, with the planned December 2018 introduction of the CBOE-backed Ether futures contract potentially lining up with a substantial decline in the price of ETH.
On the other hand, however, Lee added that the introduction of Ether futures may alleviate some of the pain placed on Bitcoin by bears, as the short interest may translate from the BTC contract to the ETH contract. The Fundstrat executive elaborated, stating:
“Since December of this year, if one was bearish on any aspect of crypto but did not want to own the underlying, they could short BTC. They can now short eth, means the net short on BTC in futures would fall.”
Some skeptics of this theory pointed out that it is somewhat counterintuitive, but upon thinking about it further, it is clear that Tom Lee’s thought does hold some credence at the very least.
Ethereum has already had a bad year, so many are hoping that the eventual introduction of these futures will not hamper the price of the asset further. But for now, only time will tell what the short to mid-term fate of the second largest crypto asset will be.
At the time of writing, Ethereum is down 1.4% in the past 24 hours, as it currently sits at $ 294 after falling from yesterday’s highs at $ 303.
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