The world’s leading derivatives platform, CME Group Inc (NASDAQ: CME) has partnered with CF Benchmarks to launch Bitcoin (BTC) and Ethereum (ETH) reference rates, cementing crypto’ growing significance in the Asia-Pacific (APAC) region.

CME Group stated in a press release that the two new reference rates, CME CF Bitcoin Reference Rate APAC and the CME CF Ether-Dollar Reference Rate APAC will go live on September 11. These reference rates will offer a once-a-day snapshot of the US dollar price of Bitcoin and Ethereum, respectively, at 4 p.m. Hong Kong/Singapore time.

Giovanni Vicioso, Global Head of Crypto Products at CME Group, emphasized the importance of these reference rates in the context of the crypto ecosystem. “These new reference rates are designed to meet the ever-evolving needs of global participants in the growing digital asset space,” Vicioso stated.

It is worth mentioning that CME Group and CF Benchmarks have earlier solidified their partnership by introducing three new Metaverse reference rates.

The three Metaverse reference rates introduced features Axie Infinity (AXS), Chiliz (CHZ), and Decentraland (MANA). These tokens are key players in the metaverse landscape, each contributing unique aspects to the virtual realm. With their inclusion in reference rates, CME Group and CF Benchmarks acknowledge the increasing influence and potential of the metaverse space.

CME Group in APAC Market: Core Benefits

The introduction of Bitcoin and Ethereum reference rates in the APAC region is a significant step forward for the cryptocurrency ecosystem. APAC has been at the forefront of crypto adoption and innovation, with countries like Japan, South Korea, and Singapore leading the way.

Vicioso pointed out that 37% of crypto volume at CME Group year-to-year has been traded during non-US hours, with a noteworthy 11% of trades originating from the APAC region. Therefore, providing accurate reference rates tailored to this region’s trading hours and market dynamics is essential for attracting institutional investors and further legitimizing the crypto market.

One of the primary advantages of these reference rates is the potential for improved risk management and hedging strategies. Institutional investors, who frequently require precise and trustworthy data, will be able to make more informed judgments concerning their Bitcoin exposure.

Additionally, these rates are anticipated to significantly impact the risk management methods of institutions entering the crypto space, improving their ability to mitigate possible market swings. This partnership couldn’t come at a better time as the crypto market is expanding rapidly, with popular usage increasing as complemented by growing institutional interest.

Furthermore, the introduction of these reference rates contributes to the ongoing process of legitimizing the crypto market within the regulatory framework. As governments and financial watchdogs increasingly engage with the crypto space, these reference rates can be seen as a responsible step towards meeting regulatory expectations.

next

Altcoin News, Bitcoin News, Cryptocurrency News, Market News, News

American global markets firm, the CME Group Inc (NASDAQ: CME), and CF Benchmarks have partnered to launch three new metaverse reference rates as both sought to extend their footprints in the emerging Web3.0 world. According to a published press release, the three new metaverse reference rates include Axie Infinity (AXS), Chiliz (CHZ), and Decentraland (MANA).

The metaverse is a loosely used term for virtual reality-based social interactions that many believe will dominate Web3.0, considered as the next iteration of the internet. With different crypto projects building different aspects of the metaverse, the duo of the CME Group and CF Benchmarks has highlighted a need to create a more trusted reference rate for investors following these digital currencies.

“As we continue to see a rising interest in Metaverse projects, CME Group, in partnership with CF Benchmarks, will expand its suite of regulated, non-tradable Cryptocurrency Reference Rates and Real-Time Indices to include three new Metaverse tokens,” said Giovanni Vicioso, CME Group Global Head of Cryptocurrency Products. “With increased price transparency across more cryptocurrency products, market participants will be able to price sector-specific portfolios, develop structured products with greater confidence and manage price risk around various Metaverse-based projects.”

According to the CME Group, the metaverse reference rates will be computed by prices adapted from exchanges listed as the go-to places for its benchmarks. These trading platforms include Bitstamp, Coinbase Global Inc (NASDAQ: COIN), Gemini, itBit, Kraken, and LMAX Digital. Per the announcement, the Metaverse Reference Rates is not a futures product that can be traded by investors.

The metaverse reference rate will be published once a day at 4 pm London Time, but according to the CME Group, it will be accessible round the clock all year long.

CME Group and CF Benchmarks Solidifying the Metaverse

The move to provide the three new metaverse reference rates comes off as a unique contribution by the CME Group and CF Benchmarks to help with the evolution of the Web 3.0 ecosystem.

Without a trusted price source, regulators especially will always assume that key tokens are susceptible to algorithmic manipulation. By riding on the reputation of the CME Group, Axie Infinity, Chiliz and Decentraland will further be able to boast of price accuracy in league Bitcoin (BTC) and other assets previously profiled by the duo.

“These benchmarks will provide accurate and resilient pricing data for tokens linked to the Metaverse, an exciting new scion of crypto where properties and communities can exist wholly within a virtual realm,” said Sui Chung, CEO of CF Benchmarks. “CF Benchmarks is proud to continue its work with CME Group, providing investors with exposure to all facets of the digital asset class with reference rates that meet the high benchmarking standards they’ve come to expect.”

Many are optimistic that such related price benchmarks will serve as a yardstick for new institutional investors to back the new assets.

next Blockchain News, Cryptocurrency news, Market News, News

Cardano (ADA), Solana (SOL), Polkadot (DOT), and several other popular altcoins will have reference rates and real-time indices—which could lay the groundwork for more ETFs and derivative products—by the end of the month.

The CME Group, which runs the Chicago-based derivatives exchange that goes by the same name, has teamed up with CF Benchmarks, a cryptocurrency index provider, to roll out the new rates on April 25.

The new reference rates will include index pricing for Algorand (ALGO), Bitcoin Cash (BCH), Cardano, Chainlink (LINK), Cosmos (ATOM), Litecoin (LTC), Polkadot, Polygon (MATIC), Solana, Stellar Lumens (XLM) and Uniswap (UNI).

The reference rates and indices themselves are not tradable investment products. As the name suggests, a reference rate is price data for an asset. But having that data available is an important prerequisite for offering products like ETFs and futures contracts.

At launch, price data for the indices will be provided by Bitstamp, Coinbase, Gemini, itBit, and Kraken. 

“These new benchmarks, which capture 90% of the total investable cryptocurrency market cap today, are designed to allow traders, institutions and other users to confidently and more accurately manage cryptocurrency price risk, price portfolios or create structured products like ETFs,” said Tim McCourt, CME’s head of equity and FX products, in a press release.

ETFs, or exchange traded funds, bundle together assets and sell shares to investors. It’s a way to get exposure to the underlying assets without owning them directly. Futures contracts speculate on the price of an asset, which can be anything from a stock, commodity or, in this case, a cryptocurrency. 

There’s reason to believe CME won’t wait long to increase its crypto product offerings. 

Payal Shah, CME’s director of equity and cryptocurrency products, said last week that the group is “looking at” offering futures contracts for Cardano and Solana.

Right now, CME offers Bitcoin and Ethereum futures, as well as futures contracts for micro Bitcoin and micro Ethereum, which can be purchased in denominations one-tenth the size of one BTC or ETH. 

And those futures contracts have done remarkably well for CME.

Micro Bitcoin futures, which launched last May, have already generated almost 5 million contracts, said Shah. 

“In the few years—just over four years—since we launched our initial futures contract, the standard Bitcoin future with five-time multiplier, we’ve seen that grow from doing 1,000 contracts a day to now 10,000 a day,” she said. “That growth is mind-boggling.”

The excitement around investment products that give investors exposure to popular altcoins is shared by traditional and crypto native firms, too. 

“Evolve’s physical-crypto ETFs rely on CME CF reference rates to provide liquidity, tight tracking and reliable [net asset value] for investors,” Elliot Johnson, chief investment officer at Evolve ETFs, said in a press release. “We’ve very excited to see the CME CF index family expanding to lay the foundation for new, innovative ETFs in this highly coveted asset class.”

The firm offers ETFs that give investors exposure to cybersecurity, automotive innovation and, more recently, Bitcoin and Ethereum. Once the reference rates are available, Evolve could potentially create ETFs to give investors exposure to altcoins.

At Genesis Global Trading, an over-the-counter crypto trading desk, having more reference rates will also create more lines of business.

“We’re excited to be a liquidity partner on the variety of instruments that will be built on top of them,” Joshua Lim, head of derivatives at Genesis Trading, said in the release.

A liquidity partner acts as a market maker for assets, in this case cryptocurrencies, buying and selling them at specified prices as orders are placed. Unlike a centralized exchange, OTC desks operate within a broker-dealer network.

They make a profit when there’s a difference between the price that’s been quoted to a buyer and the actual price of the asset. Having reference rate data makes it possible for firms like Genesis Trading to act as the market marker for more assets, either the cryptocurrencies themselves or futures contracts.