By
Bhushan Akolkar
March 21st, 2024
CME and CF are rolling out a new real-time benchmark and crypto reference rates to further aid investors in the digital currency space.
CME Group and CF Benchmarks recently announced plans to launch 11 new crypto reference rates and real-time indices as of April 25th. CF Benchmarks, the leading provider of crypto benchmark indices, will publish these reference rates and real-time indices daily.
The CME/CF reference rates and real-time indices are non-tradable futures products that cover several digital currencies and their corresponding protocols. These include Algorand (ALGO), Bitcoin Cash (BCH), Cardano (ADA), Chainlink (LINK), Cosmos (ATOM), Litecoin (LTC), Polkadot (DOT), Polygon (MATIC), Solana (SOL), Stellar Lumens (XLM), and Uniswap (UNI).
Tim McCourt, CME Group Global Head of Equity and FX Products, spoke on the new product and its effect. According to him, the crypto reference rates and real-time indices launch was borne out of necessity due to the growing digital assets space. In the words of the high-ranking executive at one of the divisions under the world’s leading derivatives marketplace:
“As the digital asset market continues to expand, there is an increasing demand for reliable, standardized cryptocurrency pricing information based on robust, regulated reference rates.”
In addition, McCourt enumerated the advantages traders and investors can get from the new benchmarks. As he put it:
“These new benchmarks, which capture over 90% of the total investible cryptocurrency market cap today, are designed to allow traders, institutions and other users to confidently and more accurately manage cryptocurrency price risk [and] price portfolios, or create structured products like ETFs.”
Numerous leading crypto exchanges and trading platforms will provide pricing data for these new benchmarks. Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital will initially kick things off on May 3rd. Furthermore, each listed coin will trade on at least two of these trading platforms.
Industry Insiders Weigh in on the CME and CF Crypto Benchmark Initiative
CEO of CF Benchmarks, Sui Chung, also provided his take on the crypto reference rates and real-time indices. According to the CEO, the development is a strong indicator of CF Benchmarks and CME Group’s commitment to serving all investor types. This commitment is further underlined by the deep benchmark pricing, which cuts across a wider range of crypto assets.
“This also further adds to the continued adoption of the digital asset class through regulated investment products and funds,” Chung concluded.
According to Juthica Chou, Head of OTC Options Trading at Kraken, the 11 new indices benefit traditional investors immensely. This investor class will gain access to a “much broader range” of crypto assets through already familiar products.
Elliot Johnson, Chief Investment Officer at Evolve ETFs, believes that the benchmark index expansion will directly benefit his platform. This is because Evolve’s physical crypto ETFs are already dependent on CME CF Reference Rates for several insightful reasons. These include the provision of liquidity, tight tracking, as well as reliable NAV for investors.