Tom Lee, the co-founder of Fundstrat Global Advisors and a well-known bitcoin bull, has recently revealed he believes ether futures may be bad for the cryptocurrency, and good for bitcoin.
As CryptoGlobe covered, the Chicago Board Options Exchange (CBOE) is reportedly close to launching ether (ETH) futures, according to sources familiar with the matter. The product is said to potentially launch by the fourth quarter of this year.
Speaking to Business Insider, Lee argued the move won’t be good for ether as those who are bearish on it will be given an easy way to bet against it. While anticipation for bitcoin futures contracts is believed to have helped the flagship cryptocurrency surge to a new all-time high of nearly $20,000 in mid-December, shorting them is also believed to have helped it drop.
According to Lee, futures contracts are in fact to blame for the crypto market’s “gut-wrenching” drop, as his data revealed bitcoin’s price dropped around CBOE futures expirations.
The cryptocurrency is now seemingly recovering, as it’s trading at $7,320 after rising 3.2% in the last 24-hour period. Helping it recover were Eminem, who recently mentioned the cryptocurrency in his tenth album “Kamikaze”, and hedge fund manager Mark Yusko who slammed its critics while noting cryptos will be the “biggest asset” within a decade.
While ether futures can be bad for the second-largest cryptocurrency by market cap, they can benefit bitcoin, Lee noted. This, as they’ll help alleviate the pressure the cryptocurrency is under by giving crypto bears an alternative currency to short. He was quoted as saying:
Since December of this year, if one was bearish on any aspect of crypto but did not want to own the underlying, they could short btc. They can now short eth, means the net short on btc in futures would fall.
The CBOE is set to base its ether futures contracts on Gemini’s underlying market. Its bitcoin futures are also based on the Winklevoss twins’ cryptocurrency exchange. Ether futures haven’t yet launched as the exchange is reportedly waiting on the US Commodities and Futures Trading Commission (CFTC) to approve the product.
Tom Lee has recently revealed he believes bitcoin may end the year “explosively higher” thanks to a correlation between the cryptocurrency and emerging markets. He has notably been maintaining a $25,000 by year-end price prediction for BTC throughout the bearish trend