Short trades on ether bore brunt of futures liquidations

Short trades on ether bore brunt of futures liquidations

Short trades on ether bore the brunt of futures liquidations in the past 24 hours as major financial firms readied a formal plan to issue ether futures ETFs in the U.S.

Following reports of upcoming ether futures ETF listings, ether prices rose nearly 25 per cent and trading volumes increased by more than 5%. On Friday, etractors traded at $1,660 in Asia afternoon hours, extending gains to more than 6% since Monday.

Although prices rose due to a rapid acceptance of ether, they were likely buoyed by hopes for a quick approval from traditional finance players who have, so far, had limited trading options to trade the second-largest token by market capitalization.

Bloomberg ETF analyst Eric Balchunas ETF futures ETFs are 'highly likely to start rolling out in early Oct.' Balchunas said in a later tweet that the U.S. Securities and Exchange Commission wanted to accelerate the launch of these futures.

The price bump, however, caught bearish traders in the crosshairs. Coinglass data shows some $11 million in liquidations for traders of ether futures on crypto exchanges who were short- or betting against the asset. The resulting liquidations accounted for nearly 85% of all ether liquidations on Thursday.

A trader's leveraged position is closing due to a partial or total loss of the initial margin as a result of liquidation. When a trader cannot meet the margin requirements for a leveraged position, he or she cannot obtain sufficient funds to maintain the trade open, it could result in a significant loss of value.

The data shows that OKX traders account for a third of liquidated positions, followed by Binance and Huobi.

VanEck, the $77.8 billion asset under management firm, said Thursday it is planning to roll out its ether futures ETF that will invest in standardized, cash-settled ETH futures contracts traded on commodity exchanges registered with the Commodity Futures Trading Commission.