Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Ethereum Forum => Ethereum News & Updates => Topic started by: PRIBO247 on December 12, 2018, 09:23:17 PM
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It’s been a year since the CFTC gave a regulatory green
light for bitcoin futures and ether futures could be next. But
this time around, the agency is taking its time, as
evidenced by a recent request for input on the third biggest
cryptocurrency based on market cap to learn what sets it
apart from bitcoin. Regulators are exploring new
derivatives contracts after the SEC suggested that they
would not seek enforcement against Ethereum.
Kevin Murcko, who is at the helm of crypto exchange
CoinMetro, stated:
"lt was only a matter of time before the
CFTC made its own judgement as it has
jurisdiction over both futures and
commodities – the only two options
under which crypto assets, not akin to
securities, can be classified."
Some say the CFTC rushed in with BTC futures and others
believe they moved too slowly. But, what appears to be a
more cautious approach to ETH futures could be a blessing
in disguise for the Ethereum community.
The CFTC’s decision to approve an easy bitcoin shorting
mechanism was followed by a highly volatile BTC price and
massive declines. While bitcoin futures are helping to
create a more mature market, there has been a short-term
shakeout that has come as a surprise.
Whether or not the ETH price could withstand the same type
of derivatives-infused shorting coupled with the volatility
that expiration dates introduce, however, is another
question. Despite the fact that the ETH price could use a
catalyst or two right now, the CFTC, which oversees the
commodity futures market, may be doing Ethereum a favor
by taking its sweet time.
Since BTC futures launched on the Cboe and CME a year
ago, it’s been nothing but trouble for the bitcoin price. The
regulated derivatives contracts make it easier for
institutions to trade bitcoin, but that includes taking both
long and short positions.
The Federal Bank of San Francisco believes there is a link,
publishing an economic letter earlier this year that stated:
“[The] launch of bitcoin futures allowed pessimists to enter
the market, which contributed to the reversal of the bitcoin
price dynamics.”
Meanwhile, a recent report by Cindicator suggests
otherwise. Researchers compared trading volumes in the
OTC market with crypto exchanges and bitcoin futures,
determining: “Bitcoins are traded mostly on crypto
exchanges and futures prices have a minor impact on price
development.”
The Cindicator team took it a step further by examining the
bitcoin price around futures expiration dates considering
“arbitrageurs trying to gain from differences between
futures and spot prices that can be produced by
lower liquidity and/or differing demand-supply dynamics of
futures and spot investors in the short term.”
Ultimately their research determined that there is “no solid
basis” for the notion that bitcoin price trade movements are
buttressed by futures expiration, but they admit it’s worth
exploring again once futures volume more closely
resembles that of the OTC market.
CoinMetro’s Murcko believes the CFTC’s request for more
information is a positive sign for Ethereum.
"The long-term impact of this
consultation, for the entire crypto
market, is positive too. Grey markets
often struggle to expand, so proper
frameworks and classifications from the
CFTC will help to bring institutional
money to the table and enable
traditional fiat gateways, which can
expand the retail side of the market and
facilitate mainstream adoption of crypto."
CFTC Observes Dissension In The Ethereum Community
In its request for public comments and feedback on “Ether
and its use on the Ethereum Network,” the CFTC is giving
the ETH community two months to respond, so there won’t
be any new crypto futures products in’ Christmas stockings
this year. Regulators have some issues to sort out, not the
least of which is the potential for disagreements in the
ether community surrounding the shift to a proof-of-stake
consensus.
A group of developers has assured regulators in a prepared
response that “wanting to stay on proof of work is not
something actively discussed.” In fact, the Constantinople
upgrade now has a date of January 2019, which has
removed some of the uncertainty surrounding the hard fork
and given the community reason to band together.
The CFTC also wants to know about any “intermediary
conduct that has occurred in the international Ether
derivative markets that raise market risks or challenges.”
Ethereum developers didn’t hold back, pointing to the
BitMEX exchange, whose CEO hasn’t been especially kind
to ETH, and which is behind an ETHUSD perpetual swap
product for taking long or short positions in ETH. The devs
responded:
"The off-shore exchange BitMex,
incorporated in the Seychelles, has
engaged in market manipulation through
its proprietary trading desk that has
direct advantages over customer
traders."
The next event for bitcoin futures trading will begin when
the regulated Bakkt exchange launches, currently expected
in early 2019. Bakkt already revealed that it will consider
“additional contracts as the landscape evolves,” and ETH
futures would be a logical next step. By then, perhaps the
bull market that is unfolding among developers will have
found its way into asset prices.
Source : https://cryptobriefing.com/