UK Trading Platform Crypto Facilities Launches Ethereum Futures

This is the first time ETH futures will be traded on a regulated platform

by Deyana Laguna
14 May • 2.5 min
In News

UK-based virtual currency trading firm Crypto Facilities has introduced Ethereum (ETH) futures contracts, that kicked off trading at 16:00 BST on Friday.

Crypto Facilities, which is regulated by UK’s financial watchdog, the Financial Conduct Authority (FCA), said in a statement that this would be the first time ETH futures will be traded on a regulated platform. The company added that the products will enable market participants to take long or short positions in the cryptocurrency, allowing them to broaden investment opportunities and manage risks more effectively.

“Ether is the second most liquid cryptocurrency after Bitcoin (BTC), trading in the billions of dollars daily, and we are excited to be launching ETH futures,” Crypto Facilities CEO and founder Timo Schlaefer stated. “The Ethereum network is the pre-eminent blockchain for smart contracts, and we believe this new trading instrument will attract more investors and bring greater liquidity to the marketplace.”

Chicago-based trading firm Akuna Capital and London-based market maker B2C2 will provide liquidity for the ETH futures.

Commenting on the development, Akuna's head of digital assets, Toby Allen, describe it as “another giant leap in the development of the crypto asset class”. The founder of B2C2 Max Boonen echoed this sentiment, saying that the move was a “natural next step” for Ethereum. He added that the “continuing evolution and commoditization we're seeing in Ethereum will further increase liquidity in the marketplace, enabling participants to exchange assets seamlessly and unlock value”.



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Crypto Facilities already offers futures trading for Bitcoin (BTC) and Ripple (XRP). The company also provides support to US CME Group commodities exchange, which launched its own BTC futures in December.

 

Effects on ETH price

Last week, researchers at the Federal Reserve of San Fransisco released a report suggesting that the CME listing of BTC futures triggered the currency’s dramatic price drop from its December 2017 peak, as it provided bears with the opportunity to easily take up short positions on the nascent asset. However, some analysts say that considering long-term prospectives the existence of cryptocurrency futures will prove to be bullish for the market.

Nigel Green, founder and CEO of deVere Group, an international financial consulting firm, has predicted a USD 2,500 year-end price target for Ethereum. “The upward growth will be caused by the fact that more platforms are now using Ethereum as a means of trading, smart contracts are becoming more popular and lasts the decentralization of cloud computing,” Green said in a blog post last month.

How the launch of ETH futures will affect the price of the digital asset remains to be seen. In Friday’s trading, the ETH price fell 9.56% to USD 687.80, amid a general market decline. The token’s market capitalization stood at USD 68.347 billion, according to Coins.Online data.