TD Ameritrade-backed ErisX Crypto Exchange Launches First Physically Settled Ether (ETH) Futures Contracts in the US
ErisX, the Chicago-based crypto derivatives exchange is officially the first to launch physically settled Ether (ETH) futures contracts within the U.S.
The TD Ameritrade-backed firm announced on May 11th that it has pioneered these contracts under the regulation of Commodity Futures Trading Commission (CFTC).
This move comes as a major boost to Ethereum's adoption within regulatory limits, including the vibrant global financial market. It's quite noteworthy that ErisX recently acquired a Bitlicense from the New York State Department of Financial Services (NYDFS).
With this kind of oversight, the firm is optimistic that it will attract more institutional investors into the crypto market via ETH. The announcement further echoed:
“Ethereum has genuine functionality and use cases with real people, firms and governments using the network, and it’s structure has many similarities with existing commodity markets.”
Physically Settled ETH Futures on ErisX
This launch marks Ether's debut as the second digital asset to be introduced within a regulated futures market after Bitcoin.
The current existing BTC futures market includes the Chicago Mercantile Exchange, Bakkt, and ErisX. The former markets having launched towards the end of 2018/19. However, it seems to be growing much slower than anticipated by market stakeholders.
ETH physical futures will hopefully encourage adoption in the market, as has been the progress with DApp development. By physical settlement, it simply means that the difference of the future with a prevailing market price will be sorted in the underlying asset form, ETH, as opposed to a fiat currency. The ErisX blog added that the contracts will be short-term expiring in a month or quarterly:
“Starting today individual and institutional investors can access physically delivered futures contracts based on ETH-USD with monthly and quarterly expirations.”
ETH futures come as no surprise to the crypto market portfolio; back in October 2019, the CFTC chairman predicted that they would launch within six months. This is after he had said that Ether is a commodity in his view.