A jump in cryptocurrencies took place in 2017. Several years later and until the end of 2020, digital currencies were not attracting a lot of investors. Bitcoin remains the undisputed leader in this segment. It accounts for approximately 63.3% of the entire global cryptocurrency market and has a market capitalization of approximately $581.85 billion. The second place in terms of capitalization is occupied by ether. Its share is about 15.2% with the market capitalization of $147.33 billion. We can say that ether and bitcoin are the oldest and most popular virtual coins, which marked the beginning of the cryptocurrency market.
Top 10 cryptocurrencies by market capitalization:
Bitcoin owes its record rise above the $20,000 level (at the end of 2017) to the Chicago Mercantile Exchange, which launched futures contracts on this digital currency. The same could happen with ether. On February 8, 2021, the Chicago Mercantile Exchange was going to introduce futures on ether denominated in US dollars. This could become a serious driver of its growth.
Today, the digital currency is among the leaders. Its price is almost $50 billion higher than the price of the next digital currency in the top-10 list. Notably, the currency has been keeping this position for several years already.
In spring 2020, during the coronavirus outbreak, the cryptocurrency and other markets collapsed. The ether price also slumped to $113 per virtual coin. However, 8 months later, in November 2020, the cost of ether reached $602 per unit. A month later, its massive rally began. At the moment, it is trading near a record high of $1,417.
Bitcoin reached its first high at the end of 2017. Then, the Chicago Mercantile Exchange launched its futures contract. In addition, the total trading volume as well as traders' interest in bitcoin contracts are mounting. All this provides liquidity for derivatives. Each bitcoin futures contract from CME includes five units of the currency. In December 2020, the holders of futures contracts exchanged approximately 42,800 bitcoins every day. In January 2021, this rally pushed bitcoin to its all-time high. Thus, it skyrocketed to $42,730.
Many analysts suppose that ether has every chance to beat its historical highs, like bitcoin. The CME is awaiting regulatory approval for listing Ethereum futures on February 8, 2021. The CME futures will attract those who do not want to keep funds in electronic wallets and do not plan to trust money to various unregulated exchange platforms. Therefore, there is every reason to believe that the availability of ether futures will largely contribute to the increase in the value of this digital coin.
Ethereum is an open-source decentralized blockchain that supports the smart contracts features. Ether is the platform's own cryptocurrency. In other words, Ethereum is a kind of network, and ether is the means or object of trade that provides this network with energy.
Ethereum can be called the most popular blockchain. At the moment, there are 18.8 million bitcoins and 114,373 million ethers in circulation. Bitcoin acts as an ordinary cryptocurrency and ether is a kind of distributed network.
Despite the fact that both digital currencies, bitcoin and ether, are created on the basis of the blockchain, Ethereum is much more reliable as a network. As soon as ether futures become available, it will become really popular among market participants.
Bitcoin futures is the first stage in the evolution of digital currencies. Ether has already managed to gain popularity at the first stage and took the second place in the top-10 list. Later, new digital currencies may enter the derivatives market. Today, the market offers its participants more than 8,300 currencies. However, this number is constantly growing. Thus, traders and investors are getting new opportunities.
There is no doubt that the direct exchange of tokens in the near future will become an everyday action for both professionals and beginners. Eventually, such phenomena as speculation, arbitrage transactions, and hedging will become quite common in the market. Only strict control from regulatory institutions may change the future.
