Ethereum Futures Rumour Triggers 10% ETH Price Pump
Ethereum lead the way in the cryptocurrency market on Monday afternoon, coinciding with the slightest of rumours regarding an ETH futures contract.
Cryptocurrency media reported the words of an unidentified U.S. Commodity Futures Trading Commission (CFTC) official, who suggested an Ether futures contract would be welcomed by regulators.
Regulated Ethereum Futures
According to reports, the CFTC is quite open to the idea of an Ethereum futures contract falling under their regulatory control. The unnamed official is quoted as saying:
“I think we can get comfortable with an ether derivative being under our jurisdiction.”
The source did note that the CFTC can only adjudicate on proposals that are actually placed in front of it. Nothing has been proposed to them as of yet. The official continued:
“We don’t do bold pronouncements, what we do is we look at applications before us. A derivatives exchange comes to us and says ‘we want to launch this particular product.’ … If they came to us with a particular derivative that met our requirements, I think that there’s a good chance that it would be self-certified by us.”
To date, the CFTC has sanctioned two Bitcoin futures markets by CME Group, and the CBOE Global Exchange.
Those futures markets were announced on December 1st, 2017, and were set to launch on the 18th of the same month. From the 1st to the 17th of December, the value of Bitcoin doubled from $10,000 to $20,000. Then, when the markets finally opened, the price of Bitcoin tanked.
Ethereum Price – ETH/USD
On Monday the value of Ethereum was trading at $159 before the futures speculation broke. Over the course of the next eight hours the price climbed to a peak of $175.75, marking 9.8% growth on the day.
That was accompanied by an influx of $1.5 billion worth of new trades according to CoinMarketCap. The data aggregator places ETH daily volume at $7.2 billion – up from $5.7 billion earlier in the day.
Of course, Ethereum is one of the most traded coins in existence, and not all of its 400 trading pairs come from legitimate sources. More conservative estimates on OpenMarketCap place real ETH trade volume at closer to $300 million.
Good Will Bump for ERC20 Tokens
Ethereum briefly led the way in the market cap top hundred, before it was caught up by its own progeny ERC20 tokens. The next six best market performers on Monday were all ETH-based projects; Loopring, Loom Network, iExec RLC, Qubitica, Chainlink and Nexo.
The sheer number of ETH-only token exchanges makes this a common occurrence during Ethereum pumps. Decentralized exchanges which don’t require KYC or AML make it easy to swap ETH for most other ERC20 tokens. Thus profits on Ethereum are often used to scoop up more small-cap tokens on the fly.
The impact of an Ethereum futures market is unlikely to have to the same earth-shaking effect as its Bitcoin predecessor. However, if the same pattern does play itself out, then the dump that accompanies the pump would make itself felt on all of those ERC20 pairs.
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.
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