Ether Prices Forge Higher on Derivatives Push as Fears Over Parity Wallet Fade

Ethereum clocked in at 11-week highs Monday, as investors looked past a botched cyber hack of the Parity Technologies wallet that left $190 million worth of ether frozen.

ETH/USD Price Levels

Ethereum’s native token touched highs of $373 on Monday, the strongest price level since Sept. 1. At press time, the value of ether was hovering around $370.32.

ETH/USD has gained more than 11% over the past five days, and now finds itself within $25 of all-time highs. Momentum is moving in positive direction, with the Relative Strength Index (RSI) approaching the bulls’ coveted 70 level.

With the latest gain, Ethereum’s market value now stands at $35.3 billion, according to CoinMarketCap. Only bitcoin’s $136 billion exceeds Ethereum in overall market size.

Ether Derivatives?

The recent uptrend in ether prices has come on the heels of speculation that the cryptocurrency was poised to enter the derivatives market. Bloomberg reported last week that contracts on Ethereum will be offered by an unnamed exchange going by the code word “Virtuoso.” One of the platform’s co-founders is Sunil Hirani, who sold his Creditex Group brokerage to Intercontinental Exchange Inc. in 2008.

Analysts say the potential for ether contracts was inspired in part by an institutional shift toward bitcoin futures. Last month, CME Group Inc. and CBOE Global Markets Inc. announced plans to offer bitcoin futures to institutional traders. The contracts will also have a built-in mechanism to deal with volatility, which has become part and parcel of crypto investing.

Ether responded well to news of bitcoin futures, as prices surged to new record highs. The world’s no. 2 digital currency has added more than 4,000% this year.

Bloomberg reports that Virtuoso will be governed by the U.S. Commodity Futures Trading Commission (CFTC) and marketed to institutional investors and corporations. The platform plans to offer futures, non-deliverable forwards, swaps and forwards by the second quarter of next year.

Parity Wallet

At the time of writing, Parity Technologies has not come up with a fix for the hundreds of millions of dollars worth of ether stuck in its multi-signature wallets. The funds have been in limbo for months after a novice hacker locked people out of their wallets. It has been reported that a total of 587 multi-sig wallets holding 513,774.16 ether tokens have been frozen.

Last week, Parity founder Jutta Steiner said the company was doing everything in its power to retrieve the funds.

The issue only impacts wallets created on or after July 20. Parity continues to examine the issue, and is keeping investors informed in its postmortem blog on the subject. The blog was last updated on Nov. 15.

Regarding blocked funds, the latest blog post issued the following statement:

“We deeply regret the situation and we are working hard on several Ethereum improvement proposals (EIPs), both contributing to previously existing ones and suggesting new ones that have the potential to unblock funds. These improvement proposals will also address general cases of blocked funds.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi