CME Group to Launch Ether to Bitcoin Ratio Futures

The derivatives marketplace expects that the new product will let traders efficiently capture the value of ETH and BTC in a single trade.

The Chicago Mercantile Exchange (CME) plans to introduce the Ether/Bitcoin futures, adding to its growing list of crypto-focused offerings.

In an announcement on June 29, the derivatives exchange said the product would help traders capitalize on changes in the correlation between the two largest cryptocurrencies by market cap, allowing them to gain exposure to digital assets without taking a directional view.

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

“As the relative strength of the correlation fluctuates, market idiosyncrasies may affect one coin more so than the other creating trading opportunities,” said CME.

The ETH/BTC ratio futures is scheduled to go live on July 31 under the ticker EBR. The ratio will be defined as the final settlement price of ETH divided by BTC and will always be positive across all contract months.

CME introduced the first Bitcoin futures contract in December 2017, however, it launched an Ether futures contract only in February 2021. High demand evidenced by growing levels of open interest at the time led the group to expand its digital asset offerings to micro BTC and ETH futures contracts in 2022. 

It was arguably major U.S.-based options exchanges like CME and CBOE listing Bitcoin futures that led to the approval of several Bitcoin futures exchange traded funds by the U.S. Securities and Exchange Commission (SEC), which has so far been reluctant to approve a spot Bitcoin ETF.

The agency’s justification is that Bitcoin futures ETFs track the price of CME-listed Bitcoin futures, and as such, may be less prone to market manipulation than the spot Bitcoin counterparts.