Ethereum Hits New All-Time High Above $4,600 as CME Announced Micro ETH Futures

Ethereum prices have hit an all-time high of $4,635 during the Asian trading session on Wednesday morning, according to CoinGecko.

The world’s largest smart contract network has built on weekly momentum to tap the new peak and notch up a 6% gain on the day. Over the past seven days, ETH has added 10%, and it is up 34% over the past month. At the time of writing, Ethereum prices had cooled off to trade at $4,580.

PrimeXBT partner “₿yzantinΞ General” commented that there probably wouldn’t be many tokens that outperform ETH over the next couple of months.

$ETH making new all time highs while funding rates are low, meanwhile the rest of the market has very high rates.

I think the most important question right now is “what’s going to outperform ETH next couple months?”.

And the answer is probably: “not much”. pic.twitter.com/CAQCrunEwI

— ₿yzantinΞ General (@ByzGeneral) November 3, 2021

Ethereum Fundamentals

The popular analyst believes Bitcoin could tap a new ATH first and suck liquidity from the rest of the market as has occurred in previous market cycles. But the momentum is currently with Ethereum as many new participants are being onboarded into DeFi and NFTs.

He added that there are two ways this market pumps, either BTC or ETH drags the rest of the market up.

“Right now it’s basically a tech (ETH) versus money (BTC) argument. I’m not saying tech is worth more, I’m just saying the market values the tech more at this point in time.”

Ethereum reserves on exchanges have dropped more than Bitcoin recently. This suggests investors are hodling ETH and using it to generate yields in DeFi. Naturally, there were plenty of arguments to his sentiment, with others stating that rival Blockchain tokens such as SOL, AVAX, DOT, and RUNE will outperform ETH.

As reported by CryptoPotato, the Ethereum network settled a record $536 billion during Q3, 2021.

Deflationary Economics

Ethereum’s monetary economic model is also likely to keep prices rising. Over the past week or so, Ethereum issuance has actually been deflationary because more has been burnt by EIP-1559 than has been mined.

According to the Ultrasound.Money fee burning tracker, 741,000 ETH, has been destroyed since early August. At current prices, this is equivalent to $3.4 billion going up in smoke. At current burn rates, the Ethereum network destroys 15,000 ETH, or $68.7 million, every day.

When central banks are still printing and devaluing fiat currencies, a deflationary one based on technology becomes very attractive.

CME Launched Micro ETH Futures?

The most recent price pump came shortly after the Chicago Mercantile Exchange announced a new ETH initiative. According to a press release from PR Newswire, Micro Ether futures are sized at a mere tenth of the asset’s size. However, they still retain the features and benefits of CME’s existing Ether futures.

The product comes months after CME’s launch of Micro Bitcoin futures, which are respectively sized at one-tenth the size of BTC. Over 2.7 million of those contracts have been traded since being launched in May. Meanwhile, Ether futures have traded 675 000 contracts since launch, amounting to about 33.8 million ETH.

Both Micro Ether and Micro Bitcoin Futures allow organizations to fine-tune their trading for each cryptocurrency. As both Ether and Bitcoin have recently reached all-time highs, trading each at full value can be rather imprecise.

Tim McCourt – CME Group Global Head of Equity Index and Alternative Investment Products.– recognizes why this makes Micro Ether futures necessary.

“Since the launch of Ether futures in February, we have seen steady growth in liquidity in these contracts, especially among institutional traders. At the same time, the price of ether has more than doubled since these contracts were introduced, creating demand for a micro-sized contract to make this market even more accessible to a broader range of participants.”

Micro Ether Futures will be cash-settled, as determined by the CME CF Ether-Dollar Reference Rate, which adjusts daily.