Ethereum (ETH) Is A Commodity, Declares CFTC Chairman
Bitcoin and its underlying blockchain technology are becoming increasingly prominent in the financial sector, particularly in the derivatives market. Now, it may be Ethereum’s turn to shine. The U.S. Commodity Futures Trading Commission (CFTC) has declared ETH a commodity.
Ether Derivatives To Happen Soon
The CTFC is the agency of the U.S. government in charge of regulating the futures and options markets. Therefore, as Ethereum is a commodity, it falls under the jurisdiction of the U.S. financial regulator.
On October 10, 2019, at the Yahoo Finance’s All Market Summit in New York, Chairman Heath P. Tarbert declared Ethereum a commodity. Moreover, he affirmed that it is “entirely possible” that Ether derivatives will happen within the next 12 months, or even sooner.
Before establishing that Ethereum is a commodity, in December 2018, the CFTC issued a Request for Input (RFI), asking for public comments and feedback to gain an understanding of the technology and markets for Ether and its application on the Ethereum network. The RFI stated,
The input from this request will advance the CFTC’s mission of ensuring the integrity of the derivatives markets as well as monitoring and reducing systemic risk by enhancing legal certainty in the markets. The RFI seeks to understand similarities and distinctions between certain virtual currencies, including here Ether and Bitcoin, as well as Ether-specific opportunities, challenges, and risks.
CFTC Chairman: Bitcoin Futures Are Doing Well
The CFTC acknowledges that “One of the most recent marketplace developments driving a lot of interest is the rise in prominence of virtual currencies, specifically Bitcoin.”
Indeed, at the Chicago Mercantile Exchange (CME), BTC futures trading activity has been rising spectacularly in the last few months, with institutional traders displaying increasing interest. In effect, on June 20, 2019, CME reported,
“CME Bitcoin futures open interest reaches a record for a fourth consecutive day, with 5,827 contracts traded on June 20 (29,135 equivalent bitcoin; ~$280M notional) and a 25% increase from last Friday.”
Now, at the Yahoo Finance’s All Market Summit, Tarbert reiterated that Bitcoin futures are doing well.
Do you think Ether derivatives will impact Bitcoin’s value? Let us know in the comment section below!
Images via Bitcoinist Media Library, Yahoo Finance