On June 29, the Chicago Mercantile Exchange (CME) Group Announce It plans to launch futures on the Ether/Bitcoin ratio. The futures contracts are due to launch on July 31, subject to regulatory review.
Effectively capture the relative value of Ether and Bitcoin in a single trade with Ether/Bitcoin Ratio Futures, launched on July 31st. https://t.co/WDFhIt5rJ7
— CME Group (@CMEGroup) June 29, 2023
According to the announcement, the ether/bitcoin ratio futures will be cash-settled, calculated by dividing the final settlement price of CME Group’s ether (ETH) futures by the final settlement price of CME Group’s bitcoin (BTC) futures. Additionally, the new contract will follow the same listing cycle as CME Group’s bitcoin futures and ethereum futures contracts.
Giovanni Viciioso, global head of cryptocurrency products at CME Group, highlighted the potential for relative value trading opportunities between ethereum and bitcoin. Viciios emphasized that while the two assets have historically shown a high correlation, their market dynamics may now differ, allowing the divergence in their performance to be exploited. He added:
“By adding Ether/Bitcoin ratio futures, investors will be able to gain exposure to Ether and Bitcoin in a single trade without taking a directional view. This new contract will help investors looking to hedge positions or Create opportunities for a wide range of clients who execute other trading strategies, all in an efficient and cost-effective manner.”
CME Group launched its first bitcoin futures contract in December 2017, making its first foray into the cryptocurrency market. This will be followed by the launch of Ethereum futures contracts in February 2021. Recognizing the growing demand for cryptocurrency investment opportunities, CME Group has further expanded its reach. With the introduction of micro BTC and ETH futures contracts, we will introduce new products in 2022, providing traders with more options to participate in these digital assets.
Related: CME Group to Launch 3 Metaverse Reference Rates
On April 17, CME Group announced plans to expand its cryptocurrency options by introducing new options for standard and micro bitcoin and ethereum contracts. The new contracts will come into effect on May 22, pending regulatory review.
The expansion includes daily expirations Monday through Friday, allowing traders to better manage short-term price risk. The move is intended to provide market participants with greater precision and flexibility to manage short-term price risk in bitcoin and ether amid heightened volatility in the digital asset space.
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