Ethereum on Tuesday hit a newall-time high of $1,800, 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.
The price of Ethereum's ether hit a fresh record on Tuesday, driven by the launch of CME futures a day ago.
The
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 $33 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
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 $20,000 to $13,000 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.