Reflecting a mounting institutional interest in the cryptocurrency sector from Asia, the renowned derivatives marketplace, CME Group, has unveiled Bitcoin (BTC) and Ether (ETH) reference rates targeted specifically for the Asia Pacific region.
A Strategic Collaboration for CME Group
On August 16th, CME Group announced its collaboration with the esteemed crypto indices provider CF Benchmarks. This partnership’s focal point is the forthcoming launch on September 11th of two cryptocurrency reference rates designed for the Asia Pacific audience.
For the uninitiated, reference rates play an instrumental role in the crypto domain. They are reliable and credible sources, capturing a cryptocurrency’s prevailing price. In the CME context, these rates are useful in pricing settlements for their cryptocurrency futures contracts.
Come September 11th, institutions and investors based in Asia will have access to two meticulously tracked reference rates, one each for BTC and ETH. CME Group has committed to publishing these rates daily at a consistent time—4 pm Hong Kong time. While CME Group already provides reference rates for these two prominent cryptocurrencies, those timings have historically catered more to investors in the New York and London time zones.
Reflecting on the Evolving Dynamics of Crypto Trading
Giovanni Vicioso, CME’s head of crypto products, shared some noteworthy insights. He highlighted that 37% of the company’s crypto volume trading had been observed during non-U.S. hours this year, with a notable 11% stemming from the APAC region.
He further elucidated, “These newly introduced APAC reference rates empower market participants with the tools to hedge cryptocurrency price risks more accurately. It ensures the timing aligns seamlessly with their portfolio strategies.”
These fresh reference rates underscore CME’s proactive approach in catering to the surging demand from institutions. These institutions seek precise BTC and ETH pricing, especially during the Asia-centric trading day. Furthermore, these institutions will likely leverage the daily prices for their investor products, anticipating a potential surge in demand from the end investors they serve.
An Expanded Portfolio: Beyond BTC and ETH
In their continued commitment to crypto, both CME and CF boast reference rates and real-time indexes for trending metaverse-related tokens such as Axie Infinity Shards, Chiliz (CHZ), and Decentraland. Besides, their extensive suite of reference rates encompasses aggregated data from reputed crypto spot exchanges, including stalwarts like Bitstamp, Coinbase, Gemini, and Kraken. These rates are integral to futures contract settlements, particularly for CME’s Bitcoin and Ether offerings.
Institutions are increasingly gravitating towards regions known for their crypto-friendly policies, such as Hong Kong and Singapore. These regions stand out for their proactive steps in offering regulatory clarity to burgeoning crypto enterprises.
CME Group’s latest move underscores the growing institutional interest in the crypto space, especially in the Asia-Pacific region, and their commitment to facilitating a smoother trading experience for all market participants.
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