FTX says the Ethereum merge shouldn't affect ether derivatives trading

Quick Take

  • FTX said it will not settle or halt ether-based derivatives like futures and perpetuals prior to the merge.
  • The exchange clarified it will try to support continuous trading of Ethereum derivatives during that time.

On Tuesday, crypto spot and derivatives exchange FTX notified users that derivatives markets tied to ether (ETH) will remain unaffected prior to the merge. In a blog post, the Bahamas-headquartered platform clarified it won't halt or settle ether derivatives like futures and perpetuals before the merge and it intends to keep trading live throughout the event.

The merge is a highly anticipated Ethereum upgrade in which the blockchain will transition from proof of work to proof of stake and is expected to go live in the coming months.

In a statement, FTX said, “FTX does not have any plans to halt or settle ETH futures prior to the Merge, and we will do our best to support continuous trading.”

The exchange added that its Ethereum futures and perpetual contracts — ETH-0930, ETH-1230, ETH-PERP —will track the price of proof-of-stake ether once it has gone through the merge.

FTX is the second-largest crypto exchange in terms of daily derivatives trading volume, according to CoinGecko. In the last 24 hours, the exchange has supported $7.5 billion in derivatives contracts. The exchange offers futures and perpetual contracts tied to the underlying value of ether, amongst other crypto assets. 

Today's announcement from FTX comes at a time when aggregate open interest of ether futures across exchanges spiked from $5 billion mid-June to more than $7.7 billion right now, according to data from The Block's Data Dashboard. Open interest in a futures market refers to the total value of unsettled trading contracts. Rising open interest serves as an indicator that more money is entering the asset market. While futures and perpetual contracts allow traders to gain exposure to ETH, they also offer a way for investors to hedge potential volatility in ETH's price. 


Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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