Back in mid May, Ethereum (ETH) Futures were launched by top U.K trading firm, Crypto Facilities. The same firm is now planning on offering Litecoin (LTC) futures. The report by CoinDesk indicate that the official announcement has not been made but the new investment product on the platform will be available as early as Friday, June 22nd.
The report also indicated that the new product will be offered against the United States Dollar on the platform. Investors will be able to long or short future contracts with Litecoin as the underlying asset as collateral.
The CEO of Crypto Facilities was quoted in the report as saying that:
We believe our LTC-dollar futures contracts will increase price transparency, liquidity and efficiency in the cryptocurrency markets.
However, news of any crypto based futures contracts have been met with mixed reactions by the crypto community for quite some time now. Referencing the past performance of Bitcoin when BTC Futures were offered by CBOE and CME back in December, many of the same crypto traders believe that the BTC futures are the cause of the current decline of Bitcoin to current low levels. Back in December, BTC reached levels of $20,000 only to start a decline the next day after BTC futures were offered by CBOE and CME. BTC continues to decline to this day and is currently trading at $6,662 at the moment of writing this.
The thought of offering Ethereum (ETH) contracts by CBOE was further explored by Ethereum World News when it listed the advantages and disadvantages of such a product after ETH was let off the hook by the SEC.
The first advantage of any crypto-based futures product, is the obvious feel by regular stock market investors, that digital assets are a formal means of investment. These Futures products legitimize the digital asset that backs them. This will then bring the institutional investors en masse into the crypto-verse leading to another rally similar or greater than the one experienced last December.
Two disadvantages of Ethereum futures by CBOE were also noted in the report by Ethereum World News. The first being that the price of Ethereum would enjoy a rally then a decline as was the case with Bitcoin. The second was that traders will learn from the case of Bitcoin, and short Ethereum. Shorting ETH means that the traders would flood the market with Ethereum and further cause a price dip.
In conclusion, the Litecoin futures are a welcome addition to the current products of XRP and BTC futures on the Crypto Facilities platform. Litecoin now gathers legitimacy as a viable investment option for regular stock market traders. Only time will tell of the impact such products have on the price of Litecoin in the future.