Futures on ether, the second largest cryptocurrency in terms of market capitalization and daily volume, will launch late Sunday on derivatives exchange CME, as investors seek to take advantage of mounting institutional interest in this evolving asset class. Ether, which has long lived in bitcoin’s shadow, is the digital currency or token that facilitates transactions on the ethereum blockchain. In the crypto world, the terms ether and ethereum have become interchangeable. While bitcoin is the preferred store of value in the digital ecosystem, ethereum has emerged as the leading financial infrastructure, settling more than $12 billion in daily transactions, according to digital asset manager GrayScale’s latest report. The CME listing allows investors to diversify crypto holdings outside of bitcoin and provides an avenue for investors to hedge their ethereum exposure, opening a market where bearish positions on the asset can be readily expressed. Ether futures, which follow those of bitcoin’s listing in December 2017, will be cash-settled and will be priced based on a CME reference rate that draws data from major cryptocurrency exchanges Bitstamp, Coinbase, Gemini, itBit, and Kraken. Investors don’t expect huge volumes out of the gate, much like when bitcoin futures launched three years ago, but the asset should gain traction as an easy way to get access to another crypto-based network, said John Wu, president of AVA Labs, an open-source platform for creating financial applications using blockchain technology. Smart contracts are self-executing transactions. Ethereum hit a record high of $1,764.55 on Friday, ahead of its futures launch, which helped boost the crypto sector’s market cap to about $1.2 trillion, according to data tracker CoinGecko.com. It was last up 8% at $1,729.59. Bitcoin, the largest cryptocurrency, was up 2.5% at $37,892. It hit a record high of $42,000 on Jan. 8. Since the launch of bitcoin futures three years ago, the CME has noted significant growth in their adoption from a broad array of participants, including institutional investors. Since the beginning of 2020, a total of 8,560 CME bitcoin futures contracts, equivalent to about 42,800 bitcoins, have traded on average per day, the CME said in a statement. Institutional interest has also increased, with the number of large open interest holders reaching a record of 110 in December.