CME Group launches euro-denominated Bitcoin and Ether futures

August 29, 2022 Coin Telegraph

First announced on Aug. 4, the euro-denominated Ether futures represent investment vehicles launched prior to the blockchain's transition to proof-of-stake.

Derivatives marketplace Chicago Mercantile Exchange Group has launched trading for Bitcoin euro and Ether euro futures contracts.

In a Monday announcement, CME Group said that it launched contracts for euro-denominated Bitcoin (BTC) and Ether (ETH) futures sized at 5 BTC and 50 ETH per contract. Both contracts will be listed on CME, cash-settled and based on the CME CF Bitcoin-Euro Reference Rate and CME CF Ether-Euro Reference Rate, respectively.

"Our new Bitcoin Euro and Ether Euro futures will provide institutional clients, both within and outside the U.S., with more precise and regulated tools to trade and hedge exposure to the two largest cryptocurrencies by market cap,” said CME Group global head of equity and FX products Tim McCourt.

First announced on Aug. 4, the euro-denominated ETH futures represent investment vehicles launched prior to the Merge in which the Ethereum blockchain transitions to proof-of-stake — expected between Sept. 10 an20. Cointelegraph reported that countries in Europe, the Middle East and Africa represented 28% of all trading for BTC and ETH futures contracts.

CME Group launched its first BTC futures contract in December 2017, followed by an ETH futures contract in February 2021. In 2022, the derivatives exchange expanded its offering of crypto investment vehicles to include micro BTC and ETH futures. The launch of euro-denominated BTC and ETH futures came as the euro remained at parity with the U.S. dollar — at the time of publication, 1 euro is worth roughly $1.

According to data from Cointelegraph Markets Pro, the price of ETH is $1,509 at the time of publication, having risen more than 3% in the last 24 hours. The BTC price fell below $20,000 on Sunday, hitting a 20-month low, but since rose 2% to reach $20,342.

CME Group plans to launch euro-denominated Bitcoin and Ether futures

August 4, 2022 Coin Telegraph

bitcoin futures

The futures options, expected to start trading on Aug. 29, followed the CME Group launching micro-sized Bitcoin and Ether options in March.

Major derivatives marketplace Chicago Mercantile Exchange Group aims to launch trading for Bitcoin euro and Ether euro futures contracts starting on Aug. 29.

In a Thursday announcement, CME Group said that subject to regulatory review, it plans to launch contracts for euro-denominated Bitcoin (BTC) and Ether (ETH) futures that will be sized at 5 BTC and 50 ETH per contract. Both contracts will be listed on CME, cash-settled, and based on the CME CF Bitcoin-Euro Reference Rate and CME CF Ether-Euro Reference Rate.

"Ongoing uncertainty in cryptocurrency markets, along with the robust growth and deep liquidity of our existing Bitcoin and Ether futures, is creating increased demand for risk management solutions by institutional investors outside the U.S.,” said CME Group global head of equity and FX products Tim McCourt. "Euro-denominated cryptocurrencies are the second highest traded fiat behind the U.S. dollar.”

Introducing Bitcoin Euro and Ether Euro futures, a second currency pair on our market-leading Cryptocurrency futures. Manage bitcoin and ether exposure in the underlying currency of your choice starting Aug. 29. https://t.co/PfN3hTCvWC pic.twitter.com/rci4NnAfKz
— CME Group (@CMEGroup) August 4, 2022

According to McCourt, countries in Europe, the Middle East and Africa represented 28% of all trading for BTC and ETH futures contracts. The listing announcement also followed the euro reaching parity with the U.S. dollar in July for the first time in 20 years — at the time of publication, 1 euro is worth roughly $1.02.

CME Group launched the first BTC futures contract — denominated in U.S. dollars — in December 2017, followed by an ETH futures contract in February 2021. In March, the derivatives exchange expanded its offering of crypto investment vehicles to include micro BTC and ETH futures.

Cointelegraph reported in July that CME Group’s BTC and ETH derivatives contracts saw record activity in the second quarter of 2022, with 10,700 and 6,100 contracts traded, respectively. The exchange also reported its micro BTC and ETH products had an average daily volume of 17,400 and 21,300 contracts, respectively, in Q2 2022. Much of the trading activity came amid extreme volatility in the crypto market, with the prices of both BTC and ETH dropping in May and June.

Leading Derivatives Exchange CME Group Launches Micro Bitcoin and Ether Options

March 31, 2022 Bitcoin.com

A key Ethereum price metric hits a 6 month low as ETH falls below $3K

January 21, 2022 Coin Telegraph

A key Ethereum price metric hits a 6 month low as ETH falls below K

Coin Telegraph

ETH price has been in a downtrend for 3 months, and derivatives data shows pro traders are almost ready to throw in the towel.

Ether (ETH) price lost the $3,600 support on Jan. 5 as minutes from the Federal Reserve's December FOMC meeting showed that the regulator was committed to decreasing its balance sheet and increasing interest rates in 2022.

Even with that looming overhead, Ether has problems of its own, more specifically, the ongoing $40 and higher average transaction fees. On Jan. 3 Vitalik Buterin said that Ethereum needs to be more lightweight in terms of blockchain data so that more people can manage and use it.

The concerning part of Vitalik's interview was the status of the Ethereum 2.0 upgrade, which is merely halfway implemented after six years. The subsequent roadmap phases include the "merge" and "surge" phases, followed by "full sharding implementation." When implemented, they will lead to an 80% estimated completion of the network upgrade, according to Buterin.

*Ether price at Coinbase, USD. Source: TradingView*

For those analyzing Ether's performance over the past 3 months, the current pricing seems appealing because the cryptocurrency is currently down 34% from its $4,870 all-time high. However, this short-sighted view disregards the 560% gain Ether had accrued up till Nov. 10, 2021.

Furthermore, the network's adjusted total value locked (TVL) has dropped by 17% since Ether’s price peak.

*Ethereum network total value locked, USD. Source: DefiLlama*

As shown above, the network’s TVL dropped from $166 billion to the current $138 billion. Meanwhile, competing smart contract networks like Terra saw their TVL increase from $11 billion to $18.7 billion. Fantom also increased the value locked on its smart contracts from $5 billion to $9 billion.

Due to network upgrade delays, worsening macroeconomic conditions and a 3-month long price correction, professional traders are clearly becoming frustrated and anxious.

Ether futures are at the edge of turning bearish

Quarterly futures are usually the preferred instruments of whales and arbitrage desks due to their settlement date and the price difference from spot markets. However, the contract's biggest advantage is the lack of a fluctuating funding rate.

These fixed-month contracts usually trade at a slight premium to spot markets, indicating that sellers request more money to withhold settlement longer. Therefore, futures should trade at a 5% to 15% annualized premium in healthy markets. This situation is technically defined as "contango" and is not exclusive to crypto markets.

*Ether futures 3-month annualized premium. Source: Laevitas*

As displayed above, Ether's futures contracts premium has come down from 20% on Oct. 21 to a meager 5.5%, just slightly above the neutral market threshold. Although the basis indicator remains positive, it reached the lowest level in 6 months.

The crash below $3,000 on Jan. 10 was enough to drain any bullish sentiment and more importantly, the Ethereum network’s high fees and delayed upgrades might have scared away some investors.

Currently, data shows little sign that bears are ready to take the helm. If this was the case, the Ether futures premium would have turned negative.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Ethereum futures and options data reflects traders’ mixed emotions on $3.2K ETH price

January 11, 2022 Coin Telegraph

Ethereum futures and options data reflects traders’ mixed emotions on .2K ETH price

CBDC

ETH’s futures markets are slightly bearish, but options traders appear to be interpreting the rally to $3,200 as a bottoming signal.

Ether (ETH) has been an emotional rollercoaster over the past three months primarily because its price rallied twice. First, it peaked at $4,870 on Nov. 10 and at $4,780 on Dec. 1. However, the double top was quickly followed by a harsh rejection, which led to $490 million in long futures contract liquidations in 48 hours.

Once again, hope was instilled on Dec. 8 after Ether commenced to rally 28.5% in four days to retest the $4,400 support. Soon after, the downtrend continued, leading to the $2,900 bottom on Jan. 10, which was the lowest ETH price seen in 102 days. This low marked a 40% low from the $4,870 all-time high and caused traders to question whether a bear market had been set.

*Ether/USD price at FTX. Source: TradingView*

One might argue that Ether is simply following Bitcoin's 42% correction from the Nov. 10 all-time high at $69,000 and the most recent pullback has partially been attributed to the United States Federal Reserve's potential tighter monetary policies and Kazakhstan's political turmoil impact on mining.

This simplistic analysis leaves behind some crucial developments, such as China's official digital yuan wallet becoming the most downloaded app in local mobile app stores on Jan. 10. Furthermore, a pilot version of the nation’s central bank digital currency (CBDC) is being used in select cities and it also became available for download on app stores on Jan. 4.

Even with the fiscal policy pressure and negatively skewed price action, traders should still monitor the futures contracts premium (basis rate) to analyze how bullish or bearish professional traders are.

Futures traders are becoming more anxious

The basis indicator measures the difference between longer-term futures contracts and the current spot market levels. A 5% to 15% annualized premium is expected in healthy markets. This price gap is caused by sellers demanding more money to withhold settlement longer.

However, a red alert emerges whenever this indicator fades or turns negative, a scenario known as "backwardation."

*Ether 3-month futures basis rate. Source: Laevitas.ch*

Notice how the indicator peaked at 20% on Nov. 8 as Ether surpassed $4,800, but then gradually faded away to an 8% low on Dec. 5 after ETH flash crashed to $3,480. More recently as Ether touched a $2,900 low on Jan. 10, the basis rate moved to 7%, which is its lowest level in 132 days.

Consequently, professional Ether traders are not comfortable despite the 10% recovery to $3,200 on Jan. 11.

Options traders recently flipped neutral

To exclude externalities specific to the futures instrument, one should also analyze the options markets. The 25% delta skew compares similar call (buy) and put (sell) options. The metric will turn positive when fear is prevalent because the protective put options premium is higher than similar risk call options.

The opposite holds when greed is the prevalent mood causing the 25% delta skew indicator to shift to the negative area.

*Ether 30-day options 25% delta skew. Source: TradingView*

When market makers and whales are bearish, the 25% delta skew indicator shifts to the positive area, and readings between negative 8% and positive 8% are usually deemed neutral.

Ether option traders entered "fear" mode on Jan. 8 as the 25% delta skew surpassed the 8% threshold, peaking at 11% two days later. However, the quick bounce from the $2,900 low instilled confidence in Ether options traders and also moved the options "fear and greed" metric to a meager 3%.

At the moment, there is not a consensus sentiment-wise from Ether traders because futures markets indicate slight discontent and options arbitrage desks and whales have recently abandoned their bearish stance. This makes sense because the current $3,200 price is still reflecting the recent 15% weekly drop and is far from exciting.

Ethereum shillers call for $5K ETH, and this time derivatives data is backing them up

November 1, 2021 Coin Telegraph

Ethereum shillers call for K ETH, and this time derivatives data is backing them up

basis

Ether bulls have been calling for $5,000 ETH for years, and now derivatives data suggests that the price is finally realistic.

Ether (ETH) pundits have been shouting that the $5,000 price is 'programmed,' since 2018 and some go even further by calling for $20,000 over the long-term.

$5000 $ETH.

It is programmed.
— Koroush AK (@KoroushAK) October 29, 2021

A portion of these bullish calls are based on ETH 2.0 staking and the reduced inflation resulting from EIP-1559.

At this time in 2017, $BTC was around $2k

Just 7 months later it was almost $20k

What do you think happens when the world wakes up to the APR and deflationary aspect of $ETH that is coming in less than 2 months?

$20,000 is programmed IMO

This should be your largest position
— Don't Follow Shardi B If You Hate Money $ (@ShardiB2) May 16, 2021

The $20,000 estimate is equivalent to a $2.36 trillion market capitalization, and even if it is feasible, it still seems excessively optimistic for now.

Ether has entered an ascending channel on Sep. 20, which points to $5,000 becoming a support level by late Nov.

*Ether price in USD at Kraken. Source: TradingView*

Backing the recent strength is the net value locked growth, or adjusted TVL, on Ethereum network smart contracts. TVL measures the assets deposited on decentralized applications and is usually led by lending protocols and DEX exchanges.

*Ethereum network adjusted total value locked (TVL) in USD. Source: DeBank.com*

Ether’s TVL breached the previous $71 billion all-time high on Oct. 16, accumulating a 50% gain in three months until Oct. 31.

Adverse regulatory winds coming from the United States lawmakers could be driving investors away from cryptocurrencies. Many U.S. states, including Kentucky, Texas, Alabama, Vermont, New Jersey and most recently, New York, have been cracking down on crypto lending.

Furthermore, in October, New York-based decentralized prediction market Polymarket came under investigation from the United States Commodity Futures Trading Commission (CFTC). According to a Bloomberg report on Oct. 23, the agency is evaluating whether the decentralized finance (DeFi) application allows its customers to trade binary options and swaps without the necessary regulator approval.

On the other hand, some investors expect a positive movement from traditional markets to further boost the rally. Data shows that November has been the best performing month for the S&P 500 since 1985.

Pro traders believe ETH price will move higher

To confirm investors' confidence in the $5,000 prophecy coming true, one should monitor the monthly contract's premium, known as "basis." Unlike the perpetual contract, these fixed-calendar futures do not have a funding rate, so their price will vastly differ from regular spot exchanges.

By measuring the expense gap between futures and the regular spot market, a trader can gauge the level of bullishness in the market. Whenever there's excessive buyers optimism, the three-month futures contract will trade at a 15% or higher annualized premium (basis).

Notice how not even the 9.5% correction on ETH price on Oct. 27 from $4,300 to $3,900 was enough to break those traders' spirits. Currently, the basis rate stands at 17%, which signals moderate bullishness.

Options markets show moderate bullishness

Ether made an all-time high at $4,460 on Oct. 29 and to determine how optimistic traders are we have to look at the 25% delta skew. This indicator provides a reliable "fear and greed" analysis by comparing similar call (buy) and put (sell) options side by side.

The metric will turn positive when the neutral-to-bearish put options premium is higher than similar-risk call options. This situation is usually considered a "fear" scenario. On the other hand, a negative skew translates to a higher cost of upside protection and points toward bullishness.

*Deribit Ether 60-day options 25% delta skew. Source: laevitas.ch*

The above chart shows the indicator at negative 9, flirting with the "greed" momentum. That optimistic stance started on Oct. 18, which wasn't exactly a positive day for Ether because it tested the $3,700 support multiple times.

Both derivatives indicators sit on the edge of a neutral-to-bullish zone, which should be interpreted as highly positive as it leaves room for buyers' leverage using derivatives instruments.

According to futures and options metrics, perma-bulls calling for $5,000 are likely to be correct in the short term.

Ethereum’s spot setup looks grim, but derivatives data tells a different story

September 21, 2021 Coin Telegraph

basis

Ether price is stuck in a rut, but derivatives data shows pro traders are bullish even with ETH below $3,000.

Ether (ETH) price fell below the $3,000 support on Sept. 20 as global markets entered a risk-aversion mode. The Invesco China Technology ETF (CQQQ) closed down 4.2%, while the SPDR S&P Metals and Mining ETF (XME) lost 3.8%.

Some analysts pointed to the potential ripple effects of the default of Evergrande, a major Chinese real estate company. In contrast, others blame the ongoing debates over the debt limit in Washington as the catalyst for this week's volatility. As a result, the CBOE Volatility Index (VIX), usually referred to as the "stock market fear index," jumped by more than 30% to reach its highest level since May.

On Sept.19, U.S. Treasury Secretary Janet Yellen called for Congress to raise the U.S. debt ceiling again in a Wall Street Journal op-ed. Yellen suggested that avoiding this would risk causing the government to default on payments and generate a "widespread economic catastrophe."

One of the major focuses for traditional markets is this week's U.S. Federal Open Market Committee meeting, which ends on Sept. 22. At the meeting, the Federal Reserve is expected to signal when it will cut back its $120 billion monthly asset purchase program.

How these events impact Ether price

*Ether price in USD at Bitstamp. Source: TradingView*

Even though the $3,000 level sits near the bottom range of the previous performance of the past 45 days, Ether still accumulated 210% gains in 2021. The network's adjusted total value locked (TVL) jumped from $13 billion in 2020 to $60 billion and the decentralized finance (DeFi), gaming, and nonfungible token (NFT) sectors experienced an impressive surge while Ethereum maintained dominance of the sector's market share.

Despite mean gas fees surpassing $20 in September, Ethereum has kept roughly 60% of the decentralized exchange (DEX) volume. Its largest competitor, Binance Smart Chain, held an average daily volume slightly below $1 billion, albeit having a transaction fee below $0.40.

Ether futures data shows pro traders are still bullish

Ether's quarterly futures are the preferred instruments of whales and arbitrage desks due to their settlement date and the price difference from spot markets. However, the contract's biggest advantage is the lack of a fluctuating funding rate.

*ETH futures 3-month annualized premium. Source: Laevitas*

As displayed above, Ether's futures contracts premium spiked to 15% on Sept. 6 as ETH price tested the $4,000 resistance. Apart from that brief overshot, the basis indicator ranged from 8% to 12% over the past month, considered healthy and bullish.

The crash to sub-$3,000 in the early hours of Sept. 21 was not enough to scare seasoned traders. More importantly, U.S. Securities and Exchange Commission chairman Gary Gensler's interview on cryptocurrency regulation also had no noticeable impact on Ether price. Had there been a generalized fear, Ether futures premium would have reflected this.

2 key Ethereum price metrics back traders’ confidence in $3,800 ETH

September 14, 2021 Coin Telegraph

2 key Ethereum price metrics back traders’ confidence in ,800 ETH

basis

ETH’s 90-day annualized premium and the funding rate on perpetual futures signal that traders are confident the altcoin will recapture the $3,800 level.

According to derivatives markets, Ether (ETH) traders are still confident that there is the chance formore upside even though the 23% correction on Sept. 7 took a hit on prices.

Ethereum network congestion also peaked on Sept. 7 when the average transaction fee reached $60, and since then it has remained above $17. As a result of the lingering challenges experienced by the network, investors have shifted into Ethereum competitors with bridge and layer-two capabilities. For example, Polkadot’s DOT rose by 29% over the past week and Algorand’s ALGO spiked 67%.

Undoubtedly, there’s a quest for interoperability and layer-two scaling solutions, aiming to quickly meet the explosive demand for nonfungible tokens (NFTs) and decentralized finance (DeFi) applications.

Whether the Ethereum network will sustain its absolute leadership position seems irrelevant right now, as the industry’s net value locked (adjusted total value locked) in smart contracts has risen from $13.6 billion in December 2020 to its current $82 billion.

Regulatory fear coming from the United States is likely curbing investors’ optimism in cryptocurrencies. According to a document released by a House committee on Sept. 13, lawmakers aim to close a loophole that previously allowed investors to claim capital gains deductions. The Internal Revenue Service currently considers cryptocurrencies as property in “wash sales,” and as a result, they are exempted from 30-day repurchase rules.

*Ether price on Bistamp in USD. Source: TradingView*

The brief $4,000 test on Sept. 3 momentarily caused derivatives markets to enter overdrive. The nonstop 45-day long rally had raised Ether’s price from $1,735 on July 20, a 130% increase. Meanwhile, the $3,200 support held firmly and boosted bulls’ confidence even though the altcoin dropped by 16% in eight days.

ETH futures data shows bulls are still “bullish”

Ether’s quarterly futures are the preferred instruments of whales and arbitrage desks. Due to their settlement date and the price difference from spot markets, they might seem complicated for retail traders. However, their most notable advantage is the lack of a fluctuating funding rate.

These fixed-month contracts usually trade at a slight premium to spot markets, indicating that sellers request more money to withhold settlement longer. Consequently, futures should trade at a 5% to 15% annualized premium on healthy markets. This situation is known as “contango” and is not exclusive to crypto markets.

As displayed above, Ether’s futures contracts have been holding a decent 8% premium since Aug. 9. Apart from the brief surge above 15% on Sept. 7, derivatives traders have remained cautiously optimistic.

To understand whether this movement was exclusive to those instruments, one should also analyze perpetual contracts futures data. Even though longs (buyers) and shorts (sellers) are matched at all times in any futures contract, their leverage varies.

Consequently, exchanges will charge a funding rate to whichever side is using more leverage to balance their risk, and this fee is paid to the opposing side.

*ETH perpetual futures 8-hour funding rate. Source: Bybt*

Data reveals that modest excitement started building up on Sept. 2, lasting less than five days. The positive funding rate shows that longs (buyers) were the ones paying the fees, but the movement seems reactive to the price increase, and it faded as Ether crashed on Sept. 7.

At the moment, there are no signs of weakness from Ether derivatives markets, and this could be interpreted as a bullish indicator. Investors’ attention remains focused on developments in regulation and Ethereum 2.0, which everyone assumes should settle the scalability problem for good.

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Ether futures

Ether futures are at the edge of turning bearish

Futures traders are becoming more anxious

Options traders recently flipped neutral

Pro traders believe ETH price will move higher

Options markets show moderate bullishness

How these events impact Ether price

Ether futures data shows pro traders are still bullish

ETH futures data shows bulls are still “bullish”

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