Has SEC Removed All Roadblocks for Cryptocurrency Futures?Adam Gardiner
With the knowledge that the Securities and Exchange Commission (SEC) does not currently consider Ethereum to be a security, some analysts speculate that all the potential roadblocks for cryptocurrency futures have been removed. Bitcoin futures were announced with great fanfare late last year and have proven popular with investors. And while Ethereum futures have been traded on some smaller cryptocurrency-specific foreign exchanges, the uncertainty surrounding their status as commodity or property versus security meant that mainstream financial exchanges have kept their distance from Ethereum. That may all change now that SEC has made its thoughts on Ethereum’s classification known.
Of course, Ethereum will still be subject to regulation, it’s just that the regulation will be under the watchful eyes of the Commodity Futures Trading Commission (CFTC), the same federal regulator that regulates Bitcoin futures. But with SEC regulation looking unlikely, and an existing Bitcoin product that has already passed regulatory muster, creating an Ethereum futures product should be relatively simple. That would open up Ethereum to much more investor interest than it currently enjoys.
And the possibility of futures markets for other cryptocurrencies would open up too. Other cryptocurrencies such as Litecoin, XRP, and Bitcoin Cash could end up having futures markets established for them too. The greater the acceptance of cryptocurrencies and the more investor interest is drummed up through establishment of further futures markets, the better things will get for cryptocurrency investors across the board.
That would include investors in Bitcoin IRAs, who would stand to benefit from the increased price of Bitcoin that would result from further investor demand. Given that cryptocurrencies are still only at the dawn of their integration into the world financial system and investment marketplace, there is still a long way to go. Futures are only one type of derivative, and there is yet to be established a mainstream Bitcoin options or swap market. That’s undoubtedly in the works somewhere, and when it happens it will also increase investor interest in Bitcoin and benefit the early adopters and investors who trusted in Bitcoin when others didn’t.