On June 29, 2023, CME Group announced the upcoming launch of Ether/Bitcoin Ratio futures, set to be available starting July 31. This new offering comes in the wake of increased correlation between Bitcoin and Ether, the two largest cryptocurrencies by market cap.
As per the announcement, the Ether/Bitcoin Ratio futures (EBR) will allow market participants to execute a relative value trade between Ether futures (ETH) and Bitcoin futures (BTC) contracts in a single transaction. This innovative contract is designed to provide investors with cryptocurrency exposure without the need to take a directional view.
The EBR futures will be traded on the CME Globex platform under the ticker EBR. The ratio is calculated by dividing the Ether futures price by the Bitcoin futures price, and the final settlement price for EBR is determined by dividing the Ether futures Final Settlement Price by the Bitcoin futures Final Settlement Price. The ratio will always be positive and will be available across all listed contract months.
This new offering aims to eliminate price slippage and increase matching opportunities, thereby enhancing market efficiency.
The launch of the Ether/Bitcoin Ratio futures is pending regulatory review. Once approved, it will mark a significant milestone in the cryptocurrency market, providing traders with a new tool to capitalize on the market correlations between Bitcoin and Ether.
Here are a few details of the contract specifications:
- Contract size: $1,000,000
- Trading hours and venue: The contract will be available for trading on the CME Globex platform from Sunday to Friday, 5:00 p.m. – 4:00 p.m. Central Time (CT), with a 60-minute break each day beginning at 4:00 p.m. CT.
- Listing cycle: Monthly contracts listed for six consecutive months, quarterly contracts (Mar, Jun, Sep, Dec) listed for four additional quarters, and a second Dec contract if only one is listed.
- Termination of trading: Trading terminates at 4:00 p.m. London time on the last Friday of the contract month.