The Chicago Mercantile Trade (CME) Group has introduced its intention to launch Ether/Bitcoin ratio futures on July 31, pending regulatory approval.
CME Group revealed its plans for this new product on June 29, aiming to offer merchants with a way to invest on the relative worth motion between the 2 in style cryptocurrencies.
The settlement for these futures contracts shall be in money and depend upon the ultimate costs of CME Group’s ether futures divided by its bitcoin futures. The Ether/Bitcoin Ratio futures itemizing cycle will comply with the identical sample as CME Group’s present bitcoin and ether futures contracts.
For the uninitiated, Ratio futures contracts contain utilizing the ratio between two commodities because the underlying asset. Such a contract permits merchants to capitalize on the worth variations between the 2 commodities.
Settlement is made in money, primarily based on the distinction between the contract worth and the spot worth of the ratio on the time of settlement.
Giovanni Vicioso, the worldwide head of cryptocurrency merchandise at CME Group, highlighted the potential for relative worth buying and selling alternatives between ether and bitcoin. Vicioso famous that whereas these two property have traditionally proven a excessive correlation, their market dynamics might now differ, creating prospects to revenue from their efficiency variances.
“With the addition of Ether/Bitcoin Ratio futures, traders will be capable to seize ether and bitcoin publicity in a single commerce, while not having to take a directional view. This new contract will assist create alternatives for a broad array of purchasers seeking to hedge positions or execute different buying and selling methods, all in an environment friendly, cost-effective method.”
Giovanni Vicioso, International head of crypto merchandise at CME Group
CME Group’s increasing crypto choices
CME Group has been steadily increasing its choices within the cryptocurrency area. In 2017, the corporate introduced plans to launch Bitcoin futures, which marked a big milestone within the mainstream monetary acceptance of cryptocurrencies.
Regardless of issues about potential market manipulation and volatility, CME proceeded with the launch, and bitcoin futures have develop into a vital device for institutional traders looking for BTC publicity.
In February 2021, CME Group launched Ether futures, additional increasing its vary of crypto by-product merchandise. Later that yr, Micro Bitcoin futures and Micro Ether futures had been launched, offering traders with a decrease capital requirement to entry these digital property.
Moreover, CME Group added Bitcoin Euro and Ether Euro futures to its portfolio in August.
Coinbase, a US-based crypto trade, not too long ago introduced its plans to supply bitcoin and ether futures contracts as nicely, intending to draw institutional traders.