Both Ethereum and Litecoin could be set for a transformational boost to their long-term outlook thanks to both cryptocurrencies being lined up for the US futures market. Retail brokerage TD Ameritrade recently confirmed investments in a brand-new cryptocurrency exchange, ErisX. At the time of writing, Bitcoin futures are available to TD Ameritrade’s 11 million-plus client base, when the Chicago Board Options Exchange (CBOE) introduced them in December 2017.
It is reported that ErisX will offer spot trading on Ethereum and Litecoin during the early half of 2019, with plans afoot to provide physically settled futures trading towards the end of 2019. The chance for US retail traders to dabble into altcoins such as Litecoin and Ethereum is expected to provide a surge in the long-term price of both Litecoin and Ethereum, the latter of which has lost more than four-fifths of its all-time high value since January.
There is also hope that the success of futures trading on Ethereum and Litecoin will encourage a raft of altcoins appearing on the future and spot side that retail traders could potentially buy and sell. Across the Atlantic, successful futures trading on altcoins in the US could see those looking to buy Litecoin UK wide being given the opportunity to trade the short and long-term price of Litecoin and Ethereum in London’s futures markets.
Although there is much excitement about the prospect of Ethereum and Litecoin futures trading, this positivity may need to be tempered by the reality that futures trading has done little to curb the dramatic fall in the price of Bitcoin throughout 2018. Since its all-time high at the end of last year, Bitcoin’s value has dropped by more than 60%. This has largely been attributed to investor impatience, due to a lack of institutional money flowing into the crypto futures market.
Think back to when Bitcoin futures trading was first launched by the CBOE in December 2017. Its arrival attracted so much interest and trading volume that it forced the CBOE platform into going offline. Whether Ethereum and Litecoin futures trading attracts that level of volume remains to be seen.
The bearish Ethereum market over recent months does not appear to have curbed the appetite of TD Ameritrade to introduce futures trading. Although there has been a year-long sell-off of the price of Ethereum throughout 2018, the price crash may not be attributed to crypto investors shying away from smaller initial coin offerings (ICOs) as previously feared.
A recent report published this week confirmed that the majority of the 200 largest ICOs launched have already converted the funds raised in cryptocurrency into fiat currency. A Bloomberg report also warned that Ethereum-based projects are increasingly cashing out their funds to cover project expenses.
Nevertheless, leading cryptocurrency exchange Bitmex has confirmed that the entirety of all Ethereum-hosted projects holds some 3.8 million Ethereum coins, which is a quarter of the total they originally raised during the ICOs. The amount of Ethereum converted into fiat currency stands at just $11 million, compared with the $93 million worth of crypto raised that has yet to have been cashed out.