We do the research, you get the alpha!
The chair of the US Commodities and Futures Trading Commission (CFTC) on Wednesday sounded a hopeful note on Ethereum (ETH) futures.
Appearing on Bloomberg TV, Heath Tarbert said he foresaw ether futures coming to the US market. Futures are agreements to buy or sell a specific amount of a commodity at a specific date for a set price. (So, gambling on future price, in other words.)
Tarbert reiterated that he sees Bitcoin and Ethereum as commodities that fall under the CFTC, which is why there's so much CFTC activity in the digital asset space.
"I want the United States of America to lead in this," he said, referring not just to digital assets but also blockchain technology. He concluded with a prediction: "Certainly, we've seen Bitcoin futures, both cash-settled as well as physically delivered. My guess is we're going to see Ether futures as well, and as things start to migrate into the commodities space, we'll see even more."
It's worth noting that while the commission has previously said that Bitcoin and Ethereum are commodities, that doesn't mean they can't also be classified as securities or something else.
Bitcoin futures have had a rocky history. Cboe opened futures trading in 2017 before ultimately deciding they weren't worth the hassle in March 2019. That September, Bakkt opened physically settled Bitcoin futures trading, followed by cash-settled trading, and had registered $124 million in trading volume by the end of November. (Bitcoin options, which give the buyer a right—but not obligation—to purchase the currency, are a different story.) Cash-settlement refers to a transfer of fiat currency, whereas physical settlement refers to delivery of the actual asset, in this case Bitcoin.
Though foreign investors can trade ETH futures on non-US exchanges, none are yet available in US markets. That's likely to change, per the CFTC chair. During his short tenure, Tarbert, who took over from J. Christopher Giancarlo in April 2019, has stressed the importance of letting digital assets take root.
In November, he told an audience of crypto investors, “As a regulator, I want to, at least, create an environment where innovation can flourish.”