Tom Lee believes that the introduction of Ether futures trading will have opposing effects on the price trajectories of the top two cryptocurrencies. Lee’s declaration as the Cboe Global Markets gears up to launch Ethereum futures contracts in addition to its Bitcoin futures trading, which debuted in December 2017.
History Repeating Itself
According to Business Insider, Tom Lee, a managing partner at Fundstrat Global Advisors, believes that Ether futures trading will alter the price narrative of the market. Drawing from the introduction of a similar product for Bitcoin, Lee predicts that Ether 00 might follow the same trajectory.
When BTC futures debuted at the backend of 2017, Bitcoin price 00 rose to a new all-time high (ATH) of $19,700. After that, the top-ranked cryptocurrency took a nose-dive, reaching below $6,000 the following February. Presently, Bitcoin is down more than 60 percent from its mid-December 2017 ATH.
A New Stomping Ground for Bears
Lee is basing his analysis on the way cryptocurrency futures trading works – giving traders the ability to bet on the price movement of a ‘coin’ without having to own it. By this logic, ETH futures trading will provide an opportunity for bears to short Ether.
According to Lee, ETH futures will provide a new stomping ground for bears, relieving the pressure on Bitcoin. Commenting further, Lee said:
Since December of this year, if one was bearish on any aspect of crypto but did not want to own the underlying, they could short BTC. They can now short ETH, means the net short on BTC in futures would fall.