CME Group set to introduce ETH to BTC Ratio futures

On June 29, the Chicago Mercantile Exchange (CME) Group announced its plans to introduce Ether/Bitcoin Ratio futures. The launch of these futures contracts is slated for July 31, subject to regulatory review.

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

According to the announcement, the settlement of Ether/Bitcoin Ratio futures will be in cash, based on the final settlement price of CME Group’s Ether (ETH) futures divided by the final settlement price of CME Group's Bitcoin (BTC) futures. Moreover, this new contract will adhere to the identical listing cycle observed in CME Group’s Bitcoin futures and Ether futures contracts.

Giovanni Vicioso, CME Group’s global head of cryptocurrency products, emphasized the potential for relative value trading opportunities between Ether and Bitcoin. Vicioso highlighted that while these two assets have historically displayed high correlation, their market dynamics may now vary, making it possible to capitalize on their performance differences. He added: 

“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. 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."

CME Group made its initial foray into the cryptocurrency market by introducing the first Bitcoin futures contract in December 2017. This was followed by the introduction of an Ether futures contract in February 2021. Recognizing the growing demand for cryptocurrency investment opportunities, CME Group further expanded its offerings in 2022 by introducing micro BTC and ETH futures contracts, providing traders with additional options to engage in these digital assets.

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On April 17, CME Group announced plans to expand its cryptocurrency options by introducing new options for standard and micro-sized Bitcoin and Ether contracts. These new contracts were set to become available from May 22, pending regulatory review.

The expansion included daily expiries from Monday to Friday, allowing traders to better manage short-term price risks. This move aimed to offer market participants increased precision and flexibility in managing Bitcoin's and Ether’s short-term price risks amid heightened volatility in the digital asset sector.

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