In recent days, announcements around new financial products using Bitcoin (BTC) have multiplied. After requests for a Bitcoin Spot ETF by BlackRock, Fidelity and Ark Invest to name a few, CME Group announces the launch of a futures contract, consisting of BTC and ETH, for the end of July. Why is the company launching this product?
Soon a futures contract with BTC and ETH?
CME Group, the world’s largest derivatives marketplace, intends to launch a futures contract consisting of Bitcoin (BTC) and Ether (ETH). Before being able to officially launch its new service on July 31, the Chicago-based company must obtain the agreement of American regulators.
Several reasons justify the launch of such a product. First, the company cites the trading opportunities associated with the difference in performance between the two assets according to market cycles.
Although they are strongly correlated, the two largest cryptocurrencies in the world do not experience the same performance. For example, while the price of Bitcoin is up 84% since January 1, 2023, Ether has grown 58% from $1,200 to $1,900.
At the same time, this new product enriches the range of financial services offered by the company. With the race for spot Bitcoin ETFs launched by BlackRockeach company seeks to innovate in order to be the first to deploy complex financial products to their customers.
According to Giovanni Vicioso, Global Head of Cryptocurrency Products for CME Group, this new futures contract offers new investment opportunities for institutional and professional investors:
” With the addition of Ether/Bitcoin futures, investors will be able to gain exposure to Ether (ETH) and Bitcoin (BTC) in a single trade, without needing to take a directional view. This new contract will help create opportunities for a wide range of clients looking to gain exposure to positions or execute other trading strategies, all in an efficient and profitable manner. »
To determine the price of this new financial productCME Group will take the value of its Ether futures contract and divide it by the value of its dedicated Bitcoin futures contract.
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CME Group: a crypto-friendly company for years
Although a large number of companies have waited for the bull market of 2021 to develop their cryptocurrency solutions, CME Group stands out from the crowd by being a pioneer in the field of financial products associated with digital assets.
In December 2017, while the king of cryptocurrencies touched the 20,000 dollar mark for the very first time, the American company announced the launch of a new product: a bitcoin futures contract.
While the price of BTC collapsed a few weeks later, losing two-thirds of its valuation, the company specializing in financial products continued to explore the cryptocurrency community. In February 2021, when the market experienced a new phase of euphoria, CME Group rolled out a new futures contract, this time on Ether.
In June 2023, volumes of futures contracts on the king of cryptocurrencies amount to 832 billion dollars. Record monthly volumes for this type of financial product is established at 2,690 billion dollars. The latter was carried out in May 2021, during the previous bullrun.
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Source: PR
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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