CME Group, a leading derivatives trading platform, announced on June 29 its plans to launch Ether/Bitcoin ratio futures this summer, pending regulatory approval. The BTC/ETH ratio futures product is scheduled to be launched on July 31, 2023.
Ratio futures contracts are a specific type of futures contract where the underlying asset is a ratio of two commodities. This type of contract enables traders to speculate on the relative price movement between two different commodities. Settlement for these contracts occurs in cash based on the difference between the contract price and the spot price of the ratio at the time of settlement. In addition to this latest offering, CME Group had previously expanded its selection of Bitcoin and Ethereum futures in early 2023. The expansion was announced in April and implemented in May.
Notable industry figures have commented on the introduction of this new product. Giovanni Vicioso, CME Group Global Head of Cryptocurrency Products, expressed that the addition of Ether/Bitcoin Ratio futures will allow investors to gain exposure to Ether and Bitcoin in a single trade without needing to adopt a specific directional view. He highlighted that while Bitcoin and Ethereum prices have been closely correlated historically, their individual growth has occasionally led to independent performance.
Jason Urban, Global Head of Trading at Galaxy Digital, stated that this investment opportunity would expand options for institutions and sophisticated investors, without mentioning whether retail users would have access to the fund.
Paul Eisma, Head of Options Trading at XBTO, suggested that this fund could positively impact certain markets by increasing trading volumes and narrowing spreads.
Brooks Dudley of Marex Capital Markets regarded the introduction of these futures as an important advancement for CFTC-regulated cryptocurrency derivatives.
