CME Group, the renowned global derivatives marketplace, has unveiled its plans to introduce Ether/Bitcoin Ratio futures on July 31, pending regulatory approval. This move represents the latest addition to CME Group’s growing array of cryptocurrency offerings.
If approved, the Ether/Bitcoin Ratio futures will enable investors to engage in a single trade that captures exposure to both Ethereum and Bitcoin without the need to take a directional view.
Efficiently capture the relative value of ether and bitcoin in a single trade with Ether/Bitcoin Ratio futures, launching July 31. https://t.co/WDFhIt5rJ7
— CME Group (@CMEGroup) June 29, 2023
However, cash settlement will be employed for these futures contracts, meaning that the final settlement price of CME Group’s ether futures will be divided by the final settlement price of its bitcoin futures to determine the value.
The CME Group, headquartered in Chicago, is a major player in the global derivatives market. The company operates prominent financial derivatives exchanges such as the Chicago Mercantile Exchange, the Chicago Board of Trade, the New York Mercantile Exchange, and The Commodity Exchange.
As the world’s leading derivatives marketplace, CME Group empowers market participants worldwide to manage risk, capture opportunities, and trade futures, options, cash, and OTC markets across a diverse range of asset classes.
CME Group to Add Ether/Bitcoin Ratio Futures
Giovanni Vicioso, CME Group’s Global Head of Cryptocurrency Products, explained that while ether and bitcoin have historically exhibited high correlation, the growth of these assets over time has introduced market dynamics that can affect their individual performances, creating opportunities for relative value trading.
By offering this innovative product, CME Group aims to provide a cost-effective and efficient way for a wide range of clients to hedge positions and execute various trading strategies.
”This new contract will help create opportunities for a broad array of clients looking to hedge positions or execute other trading strategies, all in an efficient, cost-effective manner,” added Giovanni Vicioso.
CME Group’s foray into cryptocurrency derivatives began in 2017 with the introduction of bitcoin futures, despite concerns of potential market manipulation and volatility. Over time, these futures have become a vital tool for institutional investors seeking exposure to the digital asset.
As time progressed, the company expanded its suite of crypto derivatives by launching ether futures, followed by micro bitcoin futures and micro ether futures.
Market participants anticipate that the introduction of this new contract will contribute to increased trading volumes, reduced spreads, and the facilitation of relative value trades between Bitcoin and ether.