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Tom Lee believes that the introduction of Ether futures trading will have opposite effects on the price trajectories of the two major cryptocurrencies. Lee's statement as Cboe Global Markets prepares to launch futures contracts on Ethereum in addition to the Bitcoin futures trading, which debuted in December 1945 .
History that repeats itself
According to Business Insider Tom Lee, managing partner of Fundstrat Global Advisors, believes that trading on Ether futures will change the narration of market prices. Based on the introduction of a similar product for Bitcoin, Lee predicts that Ether 0 0 could follow the same trajectory.
When BTC futures debuted at the backend of 2017, Bitcoin price 0 0 rose to a new historical high (ATH) of $ 19,700. After that, the first-class cryptocurrency suffered an immersion, reaching below $ 6,000 the next February. Currently Bitcoin is down more than 60 percent compared to ATH in mid-December 2017.
A new stomping ground for Bears
Lee bases his analysis on how cryptocurrency futures trading works – giving traders the ability to bet on the price movement of a & # 39; without having to own it. According to this logic, ETH futures trade will provide an opportunity for short Ether bears.
According to Lee, the future of ETH will provide a new ground for bears, relieving the pressure on Bitcoin. Commenting further, Lee said:
Since December of this year, if one has been bearish on any aspect of the crypt but does not want to own the underlying, it could close the BTC. Now they can short ETH, the net fall on BTC in futures will fall.
However, another noteworthy point is that the Bitcoin futures offered by the CBOE are settled in cash, which means that there is no transfer of the underlying asset. In addition, the market represents a small part of the BTC trading arena, so it is unlikely that BTC futures trading had a direct impact on the trajectory of Bitcoin prices.
The price of ETH is most likely directly affected by a weakened / weakened dollar or increased / decreased use of ICO tokens.
Futures Ethereum at the horizon
Meanwhile, the indications suggest that the introduction of ETH futures is at hand. Reportedly, Cboe is waiting for the SEC green light to officially launch the product. In June, the SEC clarified the question of whether Ethereum was a security. At the time, CBOE Director Chris Concannon commented that the decision had paved the way for the introduction of ETH futures trading.
Do you agree with the position of Tom Lee on the impact of ETH futures on the prices of ETH and BTC? Let us know your thoughts in the comments section below.
Images courtesy of Forbes, Bitcoinist Archive
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