- Ethereum on Tuesday hit a new all-time high of $US1,800, continuing its upswing since the beginning of 2021.
- The token’s record high came a day after nearly 400 ETH futures contracts were traded on the CME.
- The CME’s launch of ETH futures could increase price volatility in the coming weeks.
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The cryptocurrency soared past $US1,800 per token around 09:30 a.m. GMT, rising 10% in the last 24 hours. Ethereum’s all-time high coincided with bitcoin smashing a new record of $US48,000 after Tesla revealed a $US1.5 billion bitcoin investment, all of which is adding to the momentum of mainstream crypto adoption.
On the CME’s first day of trading ether futures, the exchange saw nearly 400 contracts traded on its platform. That equates to about 19,400 ETH, or $US33 million, according to Coin Market Cap. The exchange announced its plans to offer trading in ETH futures in December.
The CME’s launch will significantly strengthen ethereum’s credibility as an asset class just like it did for bitcoin in 2017, said Samantha Yap, founder and CEO of Yap Global. While ethereum is often still referred to as bitcoin’s lesser cousin, there will be a shift in media perception about it with this launch, she said.
Furthermore, the launch could increase price volatility. A few reasons could contribute to that, according to Gunnar Jaerv, COO at digital-asset custody-provider First Digital Trust.
Institutions would be able to trade in large volumes, as there is now more interest in digital assets than ever before. When the CME launched bitcoin futures in 2017, its price dropped from $US20,000 to $US13,000 almost immediately.
Separately, with crypto fund manager Grayscale adding more ETH to its trust, traders can expect to see a further rise in institutional interest in digital asset futures, especially as no actual delivery of ETH occurs on the settlement date, making it easier for institutional players to participate as no digital asset custody is required.