• CME Group is launching Ether (ETH) and Bitcoin (BTC) Ratio futures in July 2023, pending regulatory approval.
• The new product will help investors capture ether and bitcoin exposure in a single trade without needing to take a directional view.
• Galaxy Trading’s Jason Urban notes that the product will appeal to those looking to capitalize on changes between the two biggest digital assets by market capitalization.
CME Group’s Upcoming Ethereum & Bitcoin Ratio Futures
CME Group, one of the biggest derivatives marketplaces, has announced plans to launch a Ether (ETH) / Bitcoin (BTC) Ratio futures next month. The project, although exciting, is still pending regulatory approval and will be listed according to the same listing cycle as CME Group’s Bitcoin and Ether futures contracts.
Objective of ETH/BTC Ratio Futures
Giovanni Vicioso, the Global Head of Cryptocurrency Products at CME Group, explained that while ether and bitcoin have historically displayed a strong correlation, the growth and evolving market dynamics of these assets have created opportunities for relative value trading. “With the addition of Ether/Bitcoin Ratio futures, investors will be able to capture ether and bitcoin exposure in a single trade, without needing to take a directional view,” Vicioso said in an official press release.
Support from Institutional Investors
According to Jason Urban, the Global Head of Trading at Galaxy Trading: “We’re excited to support this product which will appeal to investors looking to take advantage of changes between the two biggest digital assets by market capitalization.” He also praised CME Group’s commitment towards developing innovative offerings essential for building an enduring ecosystem for this asset class.
Cash Settled Contract
The settlement price for Ether/Bitcoin ratio future contract will be cash based on the final settlement price of CME Groups’ Ether futures divided by its corresponding final settlement price for its Bitcoin futures contract.
Final Thoughts
Brooks Dudley from Marex Capital Markets called this development an “important advancement” as it provides another tool needed by CFTC-regulated crypto markets for institutional investors willing to make long-term investments into cryptocurrencies.