As various exchanges engage in fierce competition to bring forth a Bitcoin Exchange-Traded Fund (ETF), CME Group, a prominent player in the realm of global derivatives markets, is actively preparing to unveil futures contracts for the Ether/Bitcoin Ratio. This initiative is subject to the necessary regulatory approvals.
CME Group is a trademark of Chicago Mercantile Exchange Inc. and plans to launch the new futures product on July 31 pending regulatory review.
The settlement of this futures contract will be in cash. The settlement value will be determined by dividing the final settlement price of CME Group Ether futures by the corresponding final settlement price of CME Group Bitcoin futures.
This division calculates the Ether/Bitcoin ratio, which serves as a metric for traders to assess the relative value between the two cryptocurrencies. Similar to CME Group Bitcoin futures and Ether futures contracts, this new contract will adhere to the same listing cycle. This means it will have a comparable timeline for introduction, expiration, and trading periods.
The CME Group’s recent move aims to provide investors with access to both Ether and Bitcoin in a single trade, eliminating the need for a directional view. This new contract also opens up opportunities for a wider audience seeking to hedge positions or execute various trading strategies, as explained by Giovanni Vicioso, CME Group’s Global Head of Cryptocurrency Products.
In addition, Jason Urban, Global Head of Trading at Galaxy, believes that the launch of Ether/Bitcoin Ratio futures by CME Group will create additional digital asset opportunities for institutions and investors, within a regulated space.
According to the Global Head, the firm expressed its support for the CME product that enables investors to hedge against changes in the two largest digital assets by market capitalization.
Paul also emphasized additional benefits that could arise from the potential launch of the CME Group. These advantages include increased volumes, reduced spreads, and the exploration of relative value between BTC and ETH by institutional participants in the crypto market.
According to Brooks Dudley of Marex Capital Markets, Inc., the launch will mark a significant advancement for CFTC-regulated cryptocurrency derivatives. Furthermore, Paul Eisma, Head of Options Trading at XBTO, mentioned that market makers like XBTO could now engage in arbitrage on BTC/USD, ETH/USD, and the ETH/BTC cross “for the first time” thanks to the launch.
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