Bitcoin bulls finally return, Ethereum will launch futures contracts and hit new highs again

Bitcoin rose for the third consecutive day on Wednesday (February 3), hitting the upper limit of its trading range in the past few weeks at $36,000.

(Source: Coindesk)

"Cryptocurrencies have entered respectable territory," Scott Minerd, chief investment officer of Guggenheim Partners, a $310 billion fund manager, told CNN Business. Minerd said in December that bitcoin should be worth $400,000, but last month he said the price could fall to $20,000 in the short term. Now, he says prices as high as $600,000 are conceivable.
Ethereum, the second-largest cryptocurrency, continued its run of success on Wednesday, surpassing $1,600 after hitting a new all-time high. Ethereum has gained huge attention due to the growing activity on the Ethereum blockchain. Ethereum has risen fivefold in 2020 and has more than doubled this year, surpassing the 21% return of the more well-known Bitcoin so far this year.

(Source: Coindesk)

The Chicago Mercantile Exchange (CME) will launch new futures contracts on Ethereum next week. This could bring more buzz to Ethereum, as CME’s Bitcoin futures, which were listed in late 2017, have become one of the most popular ways for large institutions to bet on Bitcoin. “The listing of Ethereum futures on a regulated exchange should help strengthen crypto market structure, allowing investors to gain exposure to the second-largest cryptocurrency as a means of diversification from Bitcoin, or simply to hedge existing Ethereum exposure,” JPMorgan strategists wrote in a note to clients. “Negative price dynamics could emerge following the listing of Ethereum futures contracts this week, allowing some holders of physical Ethereum to hedge their exposure,” they added. But they went on to say: “A successful launch of Ethereum futures this month could be followed by the launch of options on Ethereum futures, perhaps as early as 2022, similar to the launch of options on Bitcoin futures in Q1 2020.”
Nicholas Pelecanos, head of trading at NEM Group, said: "The outlook for cryptocurrencies is only going to get stronger." Similar to Bitcoin, institutional buyers of Ethereum could be pushing the price higher: "Regardless, it is clear from the price that the supply reduction is quickly affecting the price," said Simon Peters, an analyst at trading platform eToro. "With institutions expected to further increase their positions, we expect the price of Ethereum to push higher from here."
Some analysts have also linked the recent sell-off in GameStop and other WSB stocks to cryptocurrencies. Edward Moya, senior analyst at London-based foreign exchange broker Oanda, wrote in a market update on Tuesday: "The panic selling of GameStop, AMC, and silver has triggered a good bid for cryptocurrencies."
Institutional investors are also continuing to enter. Earlier this week, Grayscale Investments, the largest Bitcoin trust fund manager, reopened its Ethereum Trust to accredited investors. Investment firm Accelerate Financial Technologies is seeking approval from Canadian securities regulators to list its Bitcoin exchange-traded fund (ETF) on the Toronto Stock Exchange. The California Public Employees' Retirement System is the largest public pension fund in the United States, worth $441 billion. On Tuesday, the agency disclosed in a filing that as of the end of 2020, it held approximately 113,000 shares of Bitcoin miner Riot Blockchain (Riot), worth approximately $1.9 million. (FX168 Financial Network)