Cboe Global Markets, the exchange behind the first market for bitcoin futures, is telling market makers it is close to rolling out futures for ether, the second-largest cryptocurrency by market capitalization, people familiar with the situation told Business Insider. The product may launch by the end of 2018, one of the people said.
Futures, which provide investors a way to bet on the future price of an asset, helped propel bitcoin to all-time highs at the end of December. Bitcoin future markets, which include Cboe and CME in the US, have been relatively muted since their launch in December.
Still, the launch of ether futures would mark a significant step in ether’s maturation as it could open the door to wider trading in the crypto and possibly an ETF.
Cboe will be basing its futures on Gemini’s underlying market, people familiar with the situation said. Cboe also based its bitcoin futures on the New York-based crypto exchange run by the Winklevoss twins. The futures and options exchange is waiting on the Commodities Futures Trading Commission to get comfortable with the product before its official launch, a person with knowledge of the matter said.
A Securities and Exchange Commission director in June notably said the agency didn’t view the trading of ether as violating securities law which could bode well for Cboe.
Cboe president Chris Concannon has previously hinted at the launch of other products tied to crypto markets.
Concannon said in December 2017 that a family of cryptocurrency products, including futures for ether and bitcoin cash, could come to fruition as the market continues to mature.
“We started down this road in the form of an ETF,” he said. “A healthy market is a healthy underlying market, derivatives markets, and an ETF. That will take time.”
Meanwhile, rival CME Group’s CEO Terry Duffy has said ether futures won’t go live on his venue any time soon.
“I will take a wait and see approach with Bitcoin for now,” Duffy told Bloomberg in July.
Bats Global Markets, which was acquired by Cboe earlier this year, attempted to list a bitcoin exchange-traded fund from the Winklevoss twins. That attempt was rejected by regulators twice.