Crypto Facilities, a London-based cryptocurrency trading platform, has recently launched ethereum futures contracts, which will allow traders to bet on the future of ether – the cryptocurrency that powers the ethereum blockchain.
The British firm, which is regulated by the country’s Financial Conduct Authority (FCA), noted that the move was a natural one as there was a gap in the market for institutional investors to go long or short on the price of ether, without incurring the risks associated with trading the actual cryptocurrency.
The firm’s chief executive officer, Timo Schlaefer, revealed he believes the futures contracts will bring more liquidity to ethereum. He stated:
“Ether is the second most liquid cryptocurrency after Bitcoin, trading in the billions of dollars daily, and we are excited to be launching ETH futures. 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.”
Crypto Facilities is reportedly going to work with liquidity provider Akuna Capital and market maker B2C2 to ensure its contracts don’t fall short of expectations. Akuna’s head of digital assets, Toby Allen, noted he was “looking forward to seeing this much-needed product fill a gap in the market.” The product, he claims, is a “giant leap in the development of the crypto asset class.”
B2C2’s founder Max Boonen also welcomed the product, as it may help Ethereum’s development, which according to some may see the cryptocurrency surpass bitcoin this year. Boonen stated:
“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. We look forward to providing liquidity for this new product.”
Notably, Crypto Facilities has already launched other cryptocurrency-based futures products, with bitcoin and XRP futures trading on its platform. Moreover, it provides CME Group the CME CF Bitcoin Reference Rate, which it uses to offer its bitcoin futures contracts.
In the UK, cryptocurrency exchange Coinfloor has also recently started offering physically settled bitcoin futures contracts. Being physically settled means they’re delivered in the asset being traded, which in this case is bitcoin.