Futures contracts are a kind of derivatives that allow investors to place a bet on the price of the asset in the future. This offers a way for Bitcoin, and now Ethereum investors to hedge against risks in the market by setting a price for the asset, a set amount of time down the line.

CBOE was also the exchange that the proposed Winklevoss ETF was supposed to be based on, before its rejection by the United States Securities and Exchanges Commission earlier this year. They seem to continue the trend with the proposed Ethereum futures contract, with the contract based on Gemini Exchange as an underlying market. Their Bitcoin futures are also based on the same market.

 

Reportedly, CBOE is waiting for the United States Commodities and Futures Commission to “get comfortable” with the product to wait for the official launch. William Hinman, the Director of Corporate Finance from the SEC has said in the past that they would not consider Ethereum to be a security. He said in a speech:

“Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions.”

 

This puts Ethereum on the same playing field as Bitcoin, which many regulators consider to be a commodity and an asset as opposed to a being a security. While other cryptocurrencies’ status is unknown as of yet, regulatory clarity on the top 2 has caused a general acceptance of them into such markets.

The President of CBOE, Chris Concannon, has said in the past that there are other cryptocurrency products on the horizon. He stated:

“We started down this road in the form of an ETF. A healthy market is a healthy underlying market, derivatives markets, and an ETF. That will take time.”

 

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