In an announcement that may have major implications on the cryptocurrency trading landscape, derivative exchange heavyweight, CME Group, is sitting at the precipice of launching Ether/Bitcoin Ratio Futures. This radical innovation is waiting on approval from regulators and is set for a July 31st inception. What’s to be noted is that these futures will be cash-settled; allowing settlements by way of cash exchange as opposed to the actual underlying asset.
The process of settling will work via the Ether futures final settlement price divided by its counterpart Bitcoin futures final number. Interestingly, the Ether/Bitcoin ratio’s value will be the result. As we pry deeper into these intriguing plans, we find the intent behind the scenes. The global head of cryptocurrency products, Giovanni Vicioso, shed light on the correlation between Ether and Bitcoin. It emerges that as both assets ripened, market dynamics directly impacted the performance of one over the other, triggering relative value trading opportunities.
Herein lies the clever play of the planned Ether/Bitcoin Ratio futures. Once set in motion, investors can capture the realm of both Ether and Bitcoin in one fell swoop without having to gamble on any directional views. This astute move by CME Group can potentially offset the uncertainty hedge that’s historically been an essential part of crypto investment – a dynamic that could reshape the present notion of strategic crypto trading.
May 2021 saw notable additions by the CME Group to their crypto investment toolkit. With daily expirations for both Bitcoin and Ether futures options contracts, along with micro-sized Bitcoin and Ether futures, the potential for a more varied investment strategy increased multifold.
However, as we sit on the teetering edge of such game-changing innovations, it’s vital to acknowledge the flip-side of the coin. This broadening of investment prospects could churn up the market turbulence by bolstering inflated investment structures. While this appears profitable on the surface, the underlying apparatus could become complicated leading to disproportionately high risk-reward situations.
In conclusion, while the introduction of Ether/Bitcoin Ratio futures promises to transit investors into a realm of streamlined crypto investment opportunities, the door to a potentially volatile market landscape is left ajar. With high stakes, the key will be smart engagement and strategic investing, bearing in mind the dynamic and unpredictable nature of cryptocurrency fluctuations.
Source: Coindesk
