CME Group to Launch Ether/Bitcoin Ratio Futures in Summer Pending Approval

CME Group to Launch Ether/Bitcoin Ratio Futures in Summer Pending Approval

CME Group, a prominent trading platform for derivatives, has announced its plans to introduce Ether/Bitcoin ratio futures this summer, subject to regulatory approval. This new futures product, set to launch on July 31, 2023, will enable traders to speculate on the relative price movement between the two cryptocurrencies.

About Ratio Futures Contracts

A ratio futures contract is a type of futures contract that utilizes a ratio of two commodities as its underlying asset. It allows traders to make predictions about the price movements between these two commodities. Upon settlement, the contract is resolved in cash based on the disparity between the contract price and the spot price of the ratio at that time.

Expanding Crypto Futures Portfolio

CME Group had already expanded its range of Bitcoin and Ethereum futures earlier in 2023. This expansion, which was announced in April and implemented in May, aimed to offer investors a more comprehensive selection of cryptocurrency futures.

Giovanni Vicioso, the Global Head of Cryptocurrency Products at CME Group, highlighted the significance of the new Ether/Bitcoin Ratio futures, stating that it allows investors to gain exposure to both Ether and Bitcoin through a single trade, removing the need for a directional view. He also noted that while Bitcoin and Ethereum prices have historically been highly correlated, their growth has enabled each asset to perform independently at times.

Increasing Investment Opportunities

Jason Urban, the Global Head of Trading at Galaxy Digital, believes that the introduction of this new futures product will expand investment opportunities for institutions and sophisticated investors. However, it remains unclear if retail users will have access to this fund.

Paul Eisma, the Head of Options Trading at XBTO, anticipates that the fund’s introduction could have a positive impact on certain markets by boosting trading volumes and narrowing spreads. This indicates potential benefits for market participants.

Furthermore, Brooks Dudley from Marex Capital Markets views this offering as a significant advancement for CFTC-regulated cryptocurrency derivatives. The introduction of Ether/Bitcoin Ratio futures by CME Group represents a notable development in the cryptocurrency derivatives market.

CME Group’s upcoming launch of Ether/Bitcoin Ratio futures marks a notable addition to its cryptocurrency futures portfolio. This new offering will provide traders with the opportunity to speculate on the relative price movements between Ether and Bitcoin. If approved, this futures product has the potential to enhance investment opportunities for institutions and sophisticated investors, potentially benefitting certain markets by increasing trading volumes and reducing spreads. Overall, CME Group’s decision reflects the growing interest and demand for cryptocurrency derivatives in the financial industry.


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