The price of Ether (ETH), the native cryptocurrency of Ethereum, achieved a new all-time high on Feb. ix, 2021. On Binance, ETH rallied to equally high as $1,830 merely hours afterwards it started to trade on CME.

ETH/USDT fifteen-minute candle price chart (Binance). Source: TradingView.com

Why is ETH rallying after the CME listing of any importance?

The timing of the ETH rally to a new tape-high is noteworthy because of the negative sentiment effectually it prior to the list.

In December 2017, CME listed the Bitcoin futures contract for the get-go fourth dimension. Within weeks, the price of Bitcoin crashed from $twenty,000 to around $6,000.

Many traders and analysts were expecting ETH to fall in a similar manner to BTC after Bitcoin futures went live on the CME in December 2017.

Withal, there are two misconceptions about this theory. First, there is no way to show that the CME Bitcoin futures list was the catalyst that acquired BTC to plummet in the weeks that followed.

Second, other than that unprovable theory, there is no clear reason to perceive CME list ETH as a bearish upshot.

The difference betwixt 2021 and 2017 is that there is unprecedented institutional demand for Ether and cryptocurrencies in general. As Cointelegraph reported, Tesla purchased $ane.5 billion worth of Bitcoin, which is nigh 10% of its cash holdings.

There is a strong take chances that the institutional demand for Bitcoin could translate into rise need for ETH. In this sense, the CME listing could be a major goad for Ethereum in the longer term.

Ryan Seans Adams, an Ethereum investor and researcher, said:

"ETH futures go live on the CME today This is huge. This is a bridge to institutions. This is a green lite from U.S regulators. ETH is condign globally accustomed commodity coin."

CME listing will be a goad for Ethereum

Researchers at the CoinMetrics team said in a note that they believe CME's ETH futures launch could accelerate inflows of ETH into the Grayscale Ethereum Trust (ETHE).

If the institutional appetite for Ethereum rises as a event and Grayscale inflows fasten, this would likely cause both the short-term and long-term sentiment around ETH to apace improve. The researchers said:

"CME's launch may potentially accelerate ETH inflows into Grayscale'south Ethereum Trust (ETHE) - investors can purchase into the Grayscale Trust while simultaneously shorting ETH, remaining market neutral and pocketing the ETHE premium. Grayscale's Ethereum trust does not currently have a method for withdrawing ETH so it effectively serves as a large token sink for ETH."

Analysts at Cabalistic Inquiry found that the ETH futures contract achieved a $30 million daily volume on its start day, which is relatively high.

CME ETH Futures book. Source: Arcane Research

As the volume continues to increase, it would show that institutions are besides considering ETH as a potential investment. The analysts said:

"ETH Futures launch on @CMEGroup Bank The first twenty-four hours of trading for CME'south ETH Futures concluded with over $30 million in volume and $20 1000000 in open interest."