• CME Group plans to launch ether/bitcoin (ETH/BTC) ratio futures on July 31, if approved by regulators.
• The futures will be cash-settled, meaning cash exchanges hands at settlement instead of the underlying instrument.
• This new offering will allow investors to capture ether and bitcoin exposure in a single trade without taking a directional view.
CME Group Announces Plans for ETH to BTC Ratio Futures
The Chicago Mercantile Exchange Center (CME Group) has announced plans to launch an ether/bitcoin (ETH/BTC) ratio futures contract on July 31, pending regulatory approval. If approved, this would be the first such product offered by CME Group.
What are Cash-Settled Futures?
The futures will be cash-settled, meaning that cash exchanges hands at settlement instead of the underlying instrument itself. The final settlement price of the CME Group Ether futures will be divided by the corresponding CME Group Bitcoin futures final settlement price in order to determine the value.
Advantages of Investing in ETH/BTC Futures
Historically, ether and bitcoin have been highly correlated; however, as these two assets have grown over time, market dynamics may affect one more than the other creating relative value trading opportunities. This new offering from CME Group allows investors to capture both ether and bitcoin exposure in a single trade without taking a directional view.
Additional Crypto Offerings from CME Group
In May 2021, CME also added daily expirations for both bitcoin and ether options contracts and micro-sized bitcoin and ether futures products as well as additional services including data services for crypto indices and benchmark rates from Crypto Facilities Ltd., which was acquired by CME group back in 2019.
Conclusion
The addition of Ether/Bitcoin Ratio Futures is an exciting development for those looking to diversify their cryptocurrency investments while still gaining access to potential returns associated with both markets