- The Chicago Mercantile Exchange (CME) Group announced that Ethereum/Bitcoin (ETH/BTC) ratio futures contracts will be launched on July 31st.
- A ratio futures contract is a type of financial derivative contract that allows investors to speculate on the relative performance of two underlying assets or hedge against that performance.
- According to the product description on the company’s website, the symbol for ETH/BTC ratio futures contracts is EBR.
CME Group, the world’s largest financial derivatives exchange operator, has announced its new product related to Ethereum and Bitcoin, which will be launched on July 31st.
CME Group to Launch New Product in July
The Chicago Mercantile Exchange (CME) Group announced that Ethereum/Bitcoin (ETH/BTC) ratio futures contracts will be launched on July 31st, subject to regulatory approval.
According to the product description on the company’s website, the symbol for ETH/BTC ratio futures contracts is EBR, and the ratio is defined as the division of the Ethereum futures price by the Bitcoin futures price. The ratio will be calculated by dividing ETH by BTC.
Giovanni Vicioso, Global Head of Crypto Products at CME Group, said in a statement, “Throughout history, Ethereum and Bitcoin have had a high degree of correlation; however, as the two assets grow over time, market dynamics can influence the performance of one more than the other and create relative value trading opportunities.”
A ratio futures contract is a type of financial derivative contract that allows investors to speculate on the relative performance of two underlying assets or hedge against that performance. The contract establishes a ratio between the two assets and enables traders to take positions based on their expectations of how the ratio will change in the future. The two assets can be related or unrelated, such as stocks, commodities, or indices.
According to Vicioso, ETH/BTC ratio futures contracts will allow investors to capture the two largest assets in the crypto industry in a single trade without the need for a biased view.
CME’s Entry into the Crypto Space
CME introduced its first Bitcoin futures contract in December 2017. This move was significant for the cryptocurrency market as it provided institutional investors with the opportunity to trade Bitcoin futures contracts through a regulated platform during the strong bull run from $1,000 at the beginning of the year to the end of the year. This enabled wider adoption and increased liquidity in the market.
However, rumors of a market downturn emerged following the launch of Bitcoin futures on CME. Tim McCourt, Global Head of Securities and Foreign Exchange Products at CME Group, dismissed such speculation.
Ethereum futures on CME were launched in February 2021, facilitating institutional investors’ exposure to the second-largest cryptocurrency worldwide.
In recent years, CME Group has expanded its offerings of digital asset products for both Bitcoin and Ethereum options, as well as micro BTC and micro ETH futures contracts.
