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ErisX Launches Physically Settled ETH Futures


Ethereum Price: $189.10
Ethereum Price (BTC): 0.021663BTC
ETH Leveraged in DeFi: 2.77M (2.49% of circulating supply)
Market Cap: $20.98B
ETH Network Dominance*: 52.46%
7 Day Candle**: $209.21 / $217.03 / $176.77 / $189.10

Something exciting happened yesterday. And it wasn’t the Bitcoin halving.

We saw ErisX launch the first U.S. based physically-settled Ether futures contracts. With trading effective immediately, institutional investors can now access CFTC-approved futures contracts on Ethereum’s native asset.

The introduction of CFTC regulated futures drastically increases the accessibility of Ether for institutional investors and others interested in the price movements of ETH. These derivatives contracts provide significantly more accurate and efficient price discovery for ETH, and enable a more diversified perspective on future expectations for the asset across different time horizons.

The best part about these contracts is that they’re physically settled, meaning it requires the digital delivery of ETH when the contracts expire – rather than the cash equivalent (see cash settled futures). Ultimately, this is a great opportunity for institutional investors to start getting their hands on ETH in a regulated manner while alternatives remain slim.

Ether futures have been highly anticipated within the community since late 2019 after the CFTC Chairman stated that Ether qualified as a commodity. The regulatory body hinted it would approve Ether futures assuming the contracts met regulatory requirements. Now, the day has finally come thanks to ErisX.

Simply put, the launch of US-regulated ETH futures is a great indication that legacy financial institutions are taking note of Ethereum’s increasing maturity and the growing demand/liquidity for Ether.

While ErisX’s contracts are not the most widely traded contracts, the core takeaway with this announcement is the US regulatory approval of Ether-based derivatives contracts. With that, we can expect more crypto-friendly financial institutions like CME and Bakkt to launch similar products in the coming future.

Ethereum Nears Its Inflection Point

There’s now four clients synced and actively validating on the ETH2 multi-client testnet  – Prysm, Lighthouse, Teku, and Nimbus. With four clients now operating on testnet, it lays the foundation for the official multi-client testnet set to launch by the Ethereum Foundation and ultimately, Phase 0’s mainnet launch.

Ethereum Foundation Researcher – Justin Drake – previously stated that there are plans to launch Phase 0 mainnet by the end of July for Ethereum’s 5th anniversary. Whether or not this holds true is dubious (similar promises were made for Devcon V last year), but the launch of Phase 0 seems almost certain to occur at some point in 2020. And the community sentiment is beginning to show this.

The daily number of addresses holding at least 32 ETH – the amount it will require to become a validator –  has increased by nearly 5,000 this year alone. Non-custodial staking service provider, RocketPool, has also seen a massive spike in interest as the price of RPL surges 6.3x in less than a month.

Chart via CoinDesk

ETH2 is making strides as we continue to see more clients sync up, audits released, and testnets become more robust with the increasing amount of activity. What’s great is that the Ethereum ecosystem is already flourishing with the proliferation of open finance (also known as DeFi). For reference, the ecosystem is nearing $1B in value locked for the second time this year.

The launch of the first US-regulated futures contracts only adds to the case.

Meanwhile Bitcoin just went through its third halving, acting as a foundational tailwind for the broader crypto market. The cherry on top is the current macroeconomic backdrop with governments across the world enacting trillions in quantitative easing to avoid economic disaster. All from freshly-printed fiat.

There’s a massive bull case forming around the narrative of digital scarcity in our increasingly digital world. Ethereum, Bitcoin and others are posed to lead that narrative as they provide the world with a new paradigm for global finance and money.

It’s an extremely exciting time to be in the crypto space, and the best is only ahead of us.

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