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Hodler’s Digest, March 11–17: Top Stories, Price Movements, Quotes and FUD of the Week

In this week’s Hodler’s Digest, Jay Clayton may not consider ETH to be a security, but the CBOE is over BTC futures contracts for now.

Top Stories This Week

U.S. District Attorney Charges OneCoin Founders With “Billions” in Alleged Fraud

The founders of international cryptocurrency pyramid scheme OneCoin have been charged by a United States district attorney. Both Konstantin Ignatov and his sister Ruja Ignatova were reportedly arrested on March 6 in Los Angeles after being accused of “wire fraud, securities fraud, and money laundering offenses” after luring investors into putting billions of dollars into the fraudulent OneCoin cryptocurrency. The crypto organization — established in 2014 and based in Sofia, the capital of Bulgaria — works as a marketing network in which members receive commissions for attracting potential buyers to buy into the cryptocurrency, with reportedly over 3 million members globally.

U.S. SEC Chairman Jay Clayton Confirms ETH Is Not a Security

Jay Clayton, the U.S. Securities and Exchanges Commission (SEC) chairman, has reportedly confirmed that Ethereum (ETH) and cryptocurrencies similar to it do not qualify as securities. Citing a letter written by Clayton in March, nonprofit crypto research organization Coin Center reported that Clayton has agreed that a digital asset’s definition as a security is “not static” and can change over time. While Clayton does not mention ETH directly, he states that he agrees that a digital asset transaction may not represent a security if the purchasers no longer expect a group to carry out entrepreneurial efforts.

Cryptocurrency Community Eyes Tether After Website Dilutes USD Backing Claims

Stablecoin Tether (USDT), which has always claimed to be backed 1:1 to the U.S. dollar, drew scrutiny this week from the crypto community when the description of its holdings on its website was subtly changed. A new update to the site, date unknown, now reads that each tether is backed by its reserves, which, “from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.” Tether has previously faced criticism due to their lack of an official audit, although bank documents from the entity last fall had seemingly confirmed the validity of Tether’s backing claims.

CBOE Will Not List Bitcoin Futures in March, Cites Need to Assess Crypto Derivatives

The Chicago Board Options Exchange (CBOE) will not add a new Bitcoin (BTC) futures market in March, the firm said this week in a statement. According to the CBOE, the entity is re-evaluating its approach to how it handles trading digital assets, noting that it does not intend to currently list additional BTC future contracts for trading. The contracts that are currently listed will expire in June, and CBOE noted that those futures are still available for trading. The CBOE had launched Bitcoin futures in December 2017, a move closely followed by the Chicago Mercantile Exchange (CME).

U.S. State of Colorado Passes Crypto Exemptions Bill Into Law

Jared S. Polis, the governor of the state of Colorado, has signed the “Colorado Digital Token Act” into law this week. The legislation, which had initially been proposed in January and sponsored at the state Senate level by Republican Jack Tate and Democrat Steve Fenberg, allows for limited exceptions for securities registration and traders, including salesperson licensing requirements for those dealing in digital tokens. According to the language of the bill, a digital token is a digital unit that is secured through a decentralized ledger or database, and can be exchanged for goods or services and transferred without an intermediary.

Winners and Losers

The crypto markets are slightly up at the end of the week, with Bitcoin trading at around $4,031, Ethereum at $140 and Ripple at $.32. Total market cap is around $139 billion.

The top three altcoin gainers of the week are ZenGold, Ormeus Coin and SounDAC. The top three altcoin losers of the week are Freicoin, Indorse Token and MFIT Coin.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“With anything that’s not financial, chances are there is some internet thing that does what you want, that’s just centralized. So it’s a bit of a harder pitch.”

Vitalik Buterin, Ethereum co-founder

“I think artists in the music industry on average capture about 11 or 12 percent of the value in the industry and those big record companies are sucking up 70 or so percent. We can replace those record companies with smart contracts on the Ethereum platform.”

Joseph Lubin, Ethereum co-founder and ConsenSys creator

“I think, again, these markets could regulate themselves if we lived in a world where we allowed that.”

Hester M. Peirce, commissioner at the U.S. Securities and Exchange Commission (SEC)

“I think Bitcoin is a technology rather than business opportunities.”

Justin Sun, CEO of blockchain developer network Tron

“I think this technology has and is already demonstrating pretty significant promise, but it’s demonstrating significant promise in the places where it’s consistent with our approach to capital raising in the past.”

Jay Clayton, U.S. Securities and Exchanges Commission (SEC) chairman

Prediction of the Week

Bitcoin Price Breakout Scheduled for August, Says Fundstrat’s Tom Lee

Thomas Lee, the co-founder of Fundstrat Global Advisors, said this week that he thinks that a Bitcoin bull run could return in the next six months, even after his December declaration that he would not give out crypto price predictions. Speaking in an interview this week, Lee noted that traders should look out for the 200-day moving average, adding that if Bitcoin can hold above $4,000 and crosses its 200-day moving average in August, “the outside window is five to six months before Bitcoin starts to look technically like it’s back in a bull market.”

FUD of the Week

Bloomberg: Key Indicators Show Bitcoin Price Could Be Losing Steam

Bloomberg reported this week that key price movement indicators have shown that Bitcoin could be heading toward another downward move. According to the report, the technical gauges that signal long-term purchasing demand for BTC are deteriorating, which means that buying pressure could increase. Bloomberg notes that the main crypto’s Moving Average Convergence/Divergence (MACD) indicator — which follows the relations between two moving averages of the price of a security — has been moving downward since mid-February. Mati Greenspan, a senior market analyst at eToro, suggested that people are moving away from Bitcoin to altcoins.

Ledger Discloses Five Reported Vulnerabilities in Two Models of Trezor Hardware Wallets

Major hardware wallets manufacturer Ledger released information this week about five vulnerabilities in its direct competitor Trezor’s devices. These were found by Ledger’s Attack Lab, which hacks into both its own and others’ devices in order to find security weaknesses. According to Ledger, both the Trezor One and Trezor T wallets face problems with the possibility to backdoor the devices with malware, as well as using side-channel attacks to guess the PIN value. Trezor has responded, noting that the vulnerabilities are not critical as they cannot be exploited remotely and all require physical access to the device.

Bitcoin Pioneer Jeff Garzik Subpoenaed in $4 Bln Lawsuit Against Craig Wright

A U.S. District Court has subpoenaed Jeff Garzik, a software engineer and Bitcoin pioneer, in relation to the $4 billion lawsuit against Craig Wrightself-proclaimed Satoshi Nakamoto. The suit, filed last February with the family of computer scientist David Kleiman, alleges that Wright stole up to 1.1 million BTC after Kleiman (rumored to be one of the original BTC developers) passed away. After Kleiman’s death in 2014, Wright had contacted the estate with the stated intention of helping to dispose the Bitcoin fortune, with Kleiman’s family now claiming that Wright did not return the funds.

Best Cointelegraph Features

The Tipping Point: Kroger, Starbucks May Ignite Retail Crypto

In this dedicated analysis, Cointelegraph looks at how big institutions like Kroger and Starbucks, which have shown an interest in cryptocurrencies, have paved the way for hope that crypto could eventually be integrated more seriously into retail payments.

Textbook Case of Crypto Hype: How Iced Tea Company Went Blockchain and Failed Despite a 289 Percent Stock Rise

During the crypto hype in 2017, a former iced tea company decided to change its name to include the word “blockchain,” seeing an immense jump in stock price even though the actual company had little to do in the crypto space. Cointelegraph examines what exactly Long Blockchain Corp. is doing after only recently leaving the beverage business.

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CBOE Will Not List Bitcoin Futures in March, Cites Need to Asses Crypto Derivatives

The Chicago Board Options Exchange will not add a new Bitcoin futures market his month.

The Chicago Board Options Exchange (CBOE) will not add a new Bitcoin (BTC) futures market in March, the firm said in a statement on March 14.

Per the statement, CBOE is re-evaluating how it approaches trading digital assets. CBOE said:

“CFE is not adding a Cboe Bitcoin (USD) (“XBT”) futures contract for trading in March 2019. CFE is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading. While it considers its next steps, CFE does not currently intend to list additional XBT futures contracts for trading.”

The currently listed futures, XBTM19, will expire in June. CBOE notes that all currently listed futures are still available for trading.

In December 2017, CBOE launched Bitcoin futures trading, followed closely by its competitor, the Chicago Mercantile Exchange (CME).

Futures contracts give investors exposure to an underlying asset — in this case Bitcoin — without the need to actually own any. Instead, investors buy contracts that track the underlying price of the asset and speculate on whether the contract price will increase or decrease by its expiration date. In the case of the CBOE Bitcoin futures market, the difference is then settled in U.S. dollars.

Earlier this week, a report from Bloomberg stated that the Bitcoin price could be headed for another large selloff. Analysts said that key technical indicators such as the Moving Average Convergence Divergence had been moving downward since mid-February. Bloomberg analyst Mike McGlone said:

“The entire industry is ripe to resume a path to lower prices. Conditions are akin to November [2018], just prior to the collapse…”

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WSJ: Bitcoin Trading at Strong Correlation with Gold as Traditional Investors Step In

A Wall Street Journal has suggested that Bitcoin’s correlation with “traditional” assets markets has been high in recent days.

A Wall Street Journal (WSJ) article published today, Dec. 28, suggests that Bitcoin (BTC)’s correlation with traditional assets markets has been high in recent days.

Citing data from research firm Excalibur Pro Inc., the WSJ states that the top cryptocurrency has traded at a 0.84 correlation to gold over the past five days, where -1 indicates complete inversion and +1 perfect correlation. Moreover, Bitcoin has traded at a 0.77 correlation to the Chicago Board of Options Exchange’s Volatility index (VIX), a benchmark index for the United States equity market volatility.

While the WSJ frames the strong correlation between traditional markets and what the article dubs as the rebellious first cryptocurrency, Bitcoin, as something of an unexpected twist of fate, the article also offers several explanations as to why the pattern may have formed.

The first is the reported influx of institutional money into the crypto space, with the WSJ citing the growth of Grayscale Investments’ over-the-counter exchange-traded fund (ETF), the Bitcoin Investment Trust, as a prime example.

As per the article, the trust saw $51 million in assets under management (AUM) during its first year (2013). By the end of 2017, in the midst of the crypto market bull run, AUM had surged to around  $3.5 billion. As of recently — due to the so-called “crypto winter” — the trust reportedly retains about $900 million AUM.

Another factor proffered is venture capital (VC) investment. The WSJ reports that whereas in 2013, VC investment in Bitcoin and the blockchain sector was at around $96 million, this grew to $500 million in 2016 and to over $2 billion in all-time VC crypto investment through the end of 2017. The WSJ gives no fresh data for 2018.

As the article notes, a pull factor for traditional capital into crypto is the building of trading services and infrastructure with high regulatory compliance; the advent of crypto futures trading, and attempts to gain broad acceptance for crypto-based ETFs.

As reported, the crypto space continues to undergo far-ranging transformation; major developments on the horizon include the launch of the Bakkt Bitcoin futures exchange from Intercontinental Exchange, the launch of investment giant Fidelity’s digital assets business, and the continued influx of stalwart investors such as Yale, Harvard and Stanford Universities.

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Ethereum (ETH) Futures Rumors Mount, As CBOE’s Bitcoin Foray Turns One

CBOE’s Bitcoin Foray Turns One

As noted by Tom Hearden, a senior trader at Skylands Capital, subsequently relayed through MarketWatch, one year and one day ago, the Chicago Board Options Exchange (CBOE Global Markets) made history, becoming one of the first financial institutions to launch a fully-fledged Bitcoin (BTC) product.

Now that crypto is in the midst of a bear market, might as well look back and reminisce… right?

This instrument was, of course, a BTC-backed futures contract that became an industry hot topic near-instantly. Still, in Ethereum World News’ original report on the matter, which seems decades old now, community members divulged that they were dissatisfied with the product’s launch, as the Chicago-based institution’s webpage crashes just eight minutes after the launch of the first bonafide BTC futures. Yet, during that day in history, December 11th, 2017, BTC purportedly rose from $14,500 to $15,700 in minutes, presumably due to the influx of interest that speculators expected.

In fact, spot and futures BTC rose so fast that CBOE, likely inundated with queries from investors worldwide, had to halt trading on its market… twice. And now, amid the market lull, catalyzed by the absence of Bitcoin bulls, CBOE’s enamorment with halting trade is as apparent as ever. Case in point, the institution had to adjust its “Lower Price Limit” percentage twice, when the futures price hit $3,160, the year-to-date low.

Mati Greenspan spoke to the aforementioned financial media outlet on the matter of the Bitcoin futures, lauding them as a resounding success: He wrote:

They’ve managed to open up the market to users who otherwise wouldn’t have access, so in that regard, I think they have been somewhat of a success. Not only did they allow people to go long, but it opened up short selling to a wider audience.

While the eToro in-house crypto analyst painted the product in a good light, as it broadened Bitcoin’s horizons, MarketWatch noted that CBOE data indicates that the product failed to catalyze an unparalleled influx of institutional money.

Bakkt, Nasdaq, and ErisX To All Launch Bitcoin Futures

Although CBOE’s in-house crypto instrument might not have garnered boatloads of investment interest, there remain a number of firms looking to unveil futures for Bitcoin, and reportedly even Ethereum.

As reported by Ethereum World News previously, Bakkt, a diverse crypto startup partnered with the Intercontinental Exchange, Starbucks, and Microsoft, has the intent to launch a physically-backed Bitcoin futures product by January 24th, 2019, in an industry first.

ErisX, backed by TD Ameritrade, issued a similar announcement, seemingly aiming to undermine its rival in Bakkt. Not much is known about this venture, but many expect that it will offer a product roster that mirrors or somewhat resembles that of Bakkt.

Most recently, Nasdaq, the world-renowned financial institution, divulged that it is working in collaboration with crypto-friendly VanEck, to bring “crypto 2.0 futures” to market, with the firm presumably looking at Ethereum and Bitcoin as supported assets. Bloomberg has revealed that Nasdaq is planning to publicly embark on its first notable crypto foray by Q1 of 2019, pending a green light from the U.S. CFTC.

 

Ethereum Product Rumored

Even with all this hype surrounding Bitcoin-centric futures, a new contender is expected, if not slated to emerge into crypto’s alternative investment vehicle scene. This, if you haven’t guessed already, is Ether (ETH), the native asset of the “world computer” that is the Ethereum Network.

Just recently, the U.S. Commodities Futures Trading Commission (CFTC) hinted that it is looking into ETH. In a statement, the prominent American financial regulator claimed that it was seeking the public’s opinion on digital currencies, most notably Ethereum. In a public release, the somewhat crypto-friendly body wrote:

The RFI [Request For Information] also seeks to understand similarities and distinctions between Ether and bitcoin, as well as Ether-specific opportunities, challenges, and risks.

It is believed that the entity is seeking feedback to precede its ruling on an Ether-backed vehicle, such as purported Ethereum futures contracts backed by CBOE. Yet, a number of crypto commentators recently took to Twitter to allude to the theory that if Ethereum-backed futures, even a non-physical instrument, goes live, the aforementioned blockchain’s native asset may actually fall, due to “rehypothecation” — a common sight in traditional financial industries.

Confetti Title Image Courtesy of Jason Leung on Unsplash

The post Ethereum (ETH) Futures Rumors Mount, As CBOE’s Bitcoin Foray Turns One appeared first on Ethereum World News.

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SEC Delays Decision on Bitcoin ETF, Sets Deadline for Late February

The SEC has delayed its decision on rule change proposals to list a VanEck, SolidX Bitcoin ETF until Feb. 27, 2019.

The United States Securities and Exchange Commission (SEC) has again postponed its decision on the first ever Bitcoin (BTC) Exchange-Traded Fund (ETF), according to an official document published Thursday, Dec. 6.

The SEC set the new deadline for Feb. 27, 2019 in order to further review the rule change proposals to list a Bitcoin ETF by investment firm VanEck and blockchain company SolidX on the Chicago Board Options Exchange (CBOE):

“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.”

Under the Securities and Exchange Act, the commission must “issue an order approving or disapproving the proposed rule change not later than 180 days” after the date of publication of notice. If the commission deems it necessary, it may subsequently extent that period by 60 days.

As the proposed rule change was first published in the Federal Register on July 2, 2018, the maximum period of consideration falls 240 days later, on Feb. 27, 2019.

Both VanEck and SolidX firms filed with the SEC to list a Bitcoin-based ETF on June, 6. Subsequently in August, the commission delayed its decision on listing the ETF until Sept. 30.

The commission then requested further comments regarding the decision, claiming that the agency has not “reached any conclusions with respect to any of the issues” on the rule change.

In early October, the commission set a deadline for submitting comments about proposed rule changes related to a number of applications for Bitcoin ETFs.

Last week, the SEC published a memorandum on a meeting with representatives from VanEck, SolidX, and CBOE. The applicants claimed there was precedent for a Bitcoin ETF based on other commodities with ETFs like gold and crude oil.

Recently, SEC commissioner Hester Peirce, who is known for her pro-crypto stance, receiving the title of “crypto mom,” claimed that a Bitcoin ETF could come “tomorrow or in 20 years.” She said:

“Don’t hold your breath. Look, it took a long time for SEC even to establish Finhub.”

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What to Expect If Ether Futures Become a Reality?

The possible launch of Ether futures could have both positive and negative ramifications for the cryptocurrency.

Less than a year after the launch of the first ever futures contracts for Bitcoin, Ethereum could be the second cryptocurrency to be traded on regulated futures exchanges.

It’s understood that the Chicago Board Options Exchange (CBOE), the same platform that launched Bitcoin futures in December 2017, is waiting for the green light from the Commodities Futures Trading Commission (CFTC) to launch Ethereum options by the end of 2018.

The CBOE will base its ETH contracts on the Gemini cryptocurrency exchange market — the base it already uses for its Bitcoin futures.

With the United States Securities and Exchange Commission (SEC) formally declaring that Ethereum was not classed as a security in June, the path ahead was seemingly paved for the prospective launch of ETH futures.

At the time, CBOE president Chris Concannon hailed the decision, saying ETH contracts had been a talking point since late 2017:

“We are pleased with the SEC’s decision to provide clarity with respect to current Ether transactions. This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”

Just three months later, there are very real grumblings that this could come to fruition, much like the build up to the eventual launch of Bitcoin futures in 2017.

The CBOE has indicated to Cointelegraph that it is indeed looking at Ethereum futures, highlighting Concannon’s interview with Quarts in June, where he laid out their thoughts on the cryptocurrency and the possibility of a futures contract:

“Ether is one of the more highly liquid cryptocurrencies out there. Along with Bitcoin, the demand is much higher in Ether than any other cryptocurrency on the market. We’ll look at launching futures in the near term, but there’s a process we have to go through before even announcing such a launch. That process is something we’ve talked to the CFTC about at length and certainly want to take steps along that process and make sure everybody is comfortable with the next product we announce.”

According to Concannon, there is significant demand and appetite for Ether futures. Having successfully launched Bitcoin futures, the CBOE hopes to use that same product design and structure and apply it to any cryptocurrency futures that may be looked at in the future.

The CBOE wouldn’t divulge any more details at this point in time, saying the relevant information would be communicated in due time.

What could happen

While the finite details of when we can expect to see these Ether futures launched is yet to be revealed, the possibility of these new offerings had a neutral effect on different cryptocurrency values.

The price of ETH turned around from a slight slump on August 31, which could be attributed to these initial reports. The price of Bitcoin showed a similar movement pattern, with a strong uptick on the same day.

Crypto market 31.08.–01.09.2018. Source: coin360.io

In response to the first reports of the CBOE’s plans, Fundstrat’s co-founder Tom Lee told Business Insider that Ether futures would have an initial negative impact on the price of the cryptocurrency:

“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 Ethereum, [which] means the net short on BTC in futures would fall.”

Good or bad?

It is not easy to predict what any market will do, and this is especially true for cryptocurrencies. However, big moves like this by mainstream financial institutions seem to influence the price of cryptocurrencies.

Cointelegraph spoke to eToro senior market analyst Mati Greenspan to get an educated view on how the launch of Ether futures could potentially affect the price of the cryptocurrency.

Greenspan was upbeat about the possibility, saying that Wall Street is working hard to build bridges to the crypto market, calling the launch of Ether futures a critical next step.

While some people on social media cited concerns that aggressive shorting would hurt the value of Ether, Greenspan offered a counterargument to that point:

“The ability to go short is a critical component of price discovery. So this is ultimately a healthy thing for the market.”

Furthermore, Greenspan believes that an Ether futures contract will put the cryptocurrency in the spotlight, which could very well attract new investors with deep pockets. The eToro analyst also believes that it could have a knock-on effect for other cryptocurrencies:

“Crypto prices are correlated strongly with each other. So anything that’s good for Ethereum should be good for Bitcoin and vice versa. So far, the futures volumes on Bitcoin have been relatively small and insignificant to the rest of the market, but as interest from institutional investors changes, we should be seeing higher volumes and new ways to trade them.”

While Greenspan offers a far more optimistic prediction of things to come, there are those that have a more cautious view of the potential launch of Ether futures.

Phillip Nunn, CEO of Wealth Chain Capital, told Cointelegraph that there is potential for certain investors to short Ether, which could have some serious consequences for companies that have launched ICOs on the Ethereum blockchain.

Nunn likens the launch of BTC futures to the FX markets some 30 years ago, where futures markets had a big sway on markets:

“2018 has seen a massive shift in the behaviour of crypto mainly due to the advent of Bitcoin futures, the charts have been different and clearly there has been market manipulation and “whales” dominating the market either way. Someone is making a lot of money. It’s similar the the FX markets in the 80’s and 90’s where it was easy to influence markets via longs and shorts.”

Furthermore, Nunn sites the risk futures pose to companies that have raised money using ERC20 tokens:

“I worry for ETH on a couple of levels. Firstly it’s market cap is a lot smaller than Bitcoin and I think ETH futures could see it dipping under $150 maybe even $100. Add to that that 95% of ICO’s raise money with ERC20 tokens in ETH, if an ICO has raised say $20m dollars and holds in ETH, suddenly that halves and I think it will trigger sell offs by these companies to BTC or FIAT to protect their interests.”

A different outcome?

While the crypto futures trail has been blazed by Bitcoin, it may well be difficult to draw any early conclusions from the launch of BTC futures in December 2017.

Shortly after the CBOE and the Chicago Mercantile Exchange (CME) launched their respective futures offerings, Bitcoin reached its all-time high of just over $20,000, before a humbling correction left markets in the red and reeling for months.

While various factors played a role in the significant pull-back in the cryptocurrency markets, it made life difficult when it came to judging how BTC futures affected the markets and influenced prices.

In July, CME indicated that it would not launch any other cryptocurrency futures offerings. However, it did release data that showed BTC futures average daily volume had increased by 93 percent over the first quarter of 2018.

Considering the growth in the number of BTC futures contracts midway through 2018, it could be fair to assume that there is a growing appetite for these type of financial offerings in the cryptocurrency space.

Nevertheless, the possible launch of Ether futures will be a space that will be keenly monitored in the months to come. As Nunn summed up in his comments to Cointelegraph, price prediction in the crypto space have been as good as a shot in the dark:

“Of course I could be wrong and it could fly to $1000 but it seems the futures strategies serve to stifle the true growth of crypto, This has certainly been the case with Bitcoin as all price predictions are out of the window.”

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Tom Lee: CBOE Ethereum Futures May Hurt ETH, But Benefit Bitcoin (BTC)

BTC Could Rise As A Result of Ethereum Futures

Even in a market downturn, development in this nascent industry rages, with firms continually releasing innovative products and services that could change the future of crypto. And as reported by Ethereum World News previously, the CBOE, the foremost US-based options exchange, is just months away from launching Ether futures that will be based on Gemini markets.

This news immediately sparked speculation about the effect this vehicle would have on the market, with many optimists noting that this futures contract should help to propel the price, development, and maturation of Ethereum, and subsequently, the growth of this industry.

While many agreed with this hope, Tom Lee, the head of research at Fundstrat Global Advisors, expects this news to benefit the price of Bitcoin (BTC) more than the price of Ethereum (ETH).

Speaking with Business Insider reporters, Lee, who has become well-known, if not near-infamous for his seemingly undying bullish sentiment on Bitcoin, noted that Ether futures will allow speculators to weigh down on the price of ETH.

His claims seem to be corroborated by the historical price action of Bitcoin following the initial CBOE and CME futures release. Since Bitcoin futures debuted in mid-December of last year, prices tanked, with Bitcoin briefly touching $20,000 before tumbling to $7,200 as it stands today. Some think thatEthereum Blockchain Token this is no unfortunate coincidence, but rather, the effect of short sellers placing bets against Bitcoin via the futures market.

As such, the Fundstrat Bitcoin bull then noted that the same effect, albeit likely not as drastic, could occur this time around as well, with the planned December 2018 introduction of the CBOE-backed Ether futures contract potentially lining up with a substantial decline in the price of ETH.

On the other hand, however, Lee added that the introduction of Ether futures may alleviate some of the pain placed on Bitcoin by bears, as the short interest may translate from the BTC contract to the ETH contract. The Fundstrat executive elaborated, stating:

“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.”

Some skeptics of this theory pointed out that it is somewhat counterintuitive, but upon thinking about it further, it is clear that Tom Lee’s thought does hold some credence at the very least.

Ethereum has already had a bad year, so many are hoping that the eventual introduction of these futures will not hamper the price of the asset further. But for now, only time will tell what the short to mid-term fate of the second largest crypto asset will be.

At the time of writing, Ethereum is down 1.4% in the past 24 hours, as it currently sits at $294 after falling from yesterday’s highs at $303.

ethereumImage Courtesy of TradingView.com

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