July 31 on CME trading in a contract for the ratio of Ethereum to bitcoin based on their futures will begin. The initiative requires regulatory approval.
Efficiently capture the relative value of ether and bitcoin in a single trade with Ether/Bitcoin Ratio futures, launching July 31. https://t.co/WDFhIt5rJ7— CME Group (@CMEGroup) June 29, 2023
The product will receive the ticker EBR. The platform will offer six monthly as well as four quarterly contracts.
Investors can use the tool to speculate on changes in the relative performance of two assets or to hedge risks.
“Historically, Ethereum and Bitcoin have been highly correlated. Market dynamics can affect their price changes to varying degrees, creating opportunities for relative value trading.” Giovanni Visioso, Global Head of Cryptocurrency Products at CME Group, explained.
CME expanded its product line to include digital asset derivatives in December 2017. The first was Bitcoin futures, which gained recognition among institutional investors. In February 2021, the platform added an Ethereum-based derivative.
According to Coinglass, CME ranks second in open interest (OI) for Bitcoin futures (97,540 BTC) and fifth for Ethereum futures (226,880 ETH).
Recall that in January 2020, the platform added options based on digital gold to the listing. Similar instruments based on the second largest cryptocurrency by capitalization appeared on the site in September 2022.
In April 2023, trading volume and OI in Ethereum options on CME hit new all-time highs. The catalyst was the successful implementation of the Shapella hard fork.