By Josiah Wilmoth
Regulated ethereum futures took one step closer to becoming a reality on Monday thanks to a new partnership between fintech startups TrueEx and ConsenSys.
Ethereum Futures Get One Step Closer as Fintech Startups TrueEx and ConsenSys Launch Reference Index
According to the announcement, the two firms have inked a deal to create a target reference index for the ethereum price, a key checkpoint in the quest to list ethereum futures and other derivatives.
At the same time, TrueEx announced that its subsidiary, the newly-created True Digital Holdings (TDH) will establish a regulated digital asset derivatives marketplace — as well as non-deliverable forwards (NDF) on bitcoin, pending approval from the Commodity Futures Trading Commission (CFTC).
“Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities,” said Sunil Hirani, founder of TDH, “but the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets.”
However, ever since bitcoin futures began trading, investors have been clamoring for access to altcoin derivatives. Ethereum seems likely to be the next cryptocurrency wrapped in a derivatives product, owing largely to its size (it’s the second-largest cryptocurrency by market cap) and relative liquidity.
‘Months Would be a Long, Long Time’
Notably, the announcement of the ethereum reference rate index sheds a bit of light on a cryptic statement ConsenSys founder Joseph Lubin made in December.
Speaking with financial news outlet Cheddar, Lubin — who also co-founded Ethereum — said that “months would be a long, long time” to wait for ethereum futures to be listed on a regulated exchange.
Granted, it has been a full three months since Lubin made that statement, and ethereum futures have not yet been announced — much less begun trading.
However, that’s largely because regulators have begun eyeing the cryptoasset markets with increased scrutiny. The Securities and Exchange Commission (SEC) surprised many analysts when it said that it did not intend to approve a cryptocurrency ETF anytime soon, and the CFTC has implemented an enhanced review process for cryptocurrency derivatives.
Nevertheless — as this announcement indicates — ethereum futures will almost certainly launch at some point in the future. The question is: how soon?
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