TOM LEE: Ether futures might be a bad thing for the crypto, and a good thing for its biggest rival

Tom Lee

Ether futures might soon come online at the Cboe Global Markets, the Chicago exchange operator.
Bitcoin bull Tom Lee tells Business Insider that might be a bad thing for ether, but a good thing for bitcoin.

Cboe is telling its trading firm clients that it is getting close to launching a market for ether futures, but that might actually be a bad thing for the cryptocurrency, one expert says.

Tom Lee, the notorious bitcoin bull who has a $25,000 price target for the coin, told Business Insider that ether futures could hurt ether and actually benefit its larger rival, bitcoin.

That's because the launch of ether futures would provide an easy way for ether bears to bet against the coin.

Futures, which give investors a way to bet on the future price of an asset, helped propel bitcoin to all-time highs at the end of December. But after they came online, the price of bitcoin tanked and it's down more than 70% since hitting an all-time high at the end of 2017. Ether futures could have a similar impact on the crypto's price, according to Lee.

On the flip side, Lee said ether futures could benefit bitcoin because they'll provide crypto bears with another way to express their view on the overall market, alleviating pressure on bitcoin shorts.

"Since December of this year, if one was bearish on any aspect of crypto but did not want to own the underlying, they could short btc," Lee said. "They can now short eth, means the net short on btc in futures would fall."

Cboe would be basing its futures on Gemini's underlying market, people familiar with the situation said. Cboe also based its bitcoin futures on the New York-based crypto exchange run by the Winklevoss twins.

The futures and options exchange is waiting on the Commodities Futures Trading Commission to get comfortable with the product before its official launch, a person with knowledge of the matter said.