Cboe Global Markets is telling market makers that it is getting close to launching 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.
The launch of Ether futures could open the door to wider trading in the crypto and possibly an ETF.
According to people familiar with the situation, Cboe would be basing its futures on Gemini’s underlying market. 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 (CFTC) to get comfortable with the product before its official launch, a person with knowledge of the matter said.
In June, a Securities and Exchange Commission director 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.”