The CME Group will launch two Asia-focused Bitcoin reference rates to serve derivatives trading needs outside US business hours. The CME CF Bitcoin Reference Rate APAC and the CME CF Ethereum-Dollar Reference Rate will be published daily at 16:00 Singapore time from Sept. 11.
According to CME Group’s crypto head Giovanni Vicioso, Asians account for 11% of all trading outside US business hours. The new Ether and Bitcoin futures reference will enable traders to leverage the precise timing of publication to hedge against volatility according to risk appetite.
Accurate References Vital to Institutional Confidence
Additionally, CF Benchmarks CEO Sui Chung said the new rates will complement the Bitcoin Reference and Ethereum-Dollar Reference Rates. He cited the rates as crucial to institutional confidence in the sector.
“These benchmarks will be calculated and administered to the same exacting standards enjoyed by their existing London and New York counterparts, which have done so much to build investor and institutional confidence in crypto financial products.”
CME averages the weighted median of a cryptocurrency’s trades across multiple time slots to arrive at the reference rate. Unlike a regular median, a weighted median assigns greater importance to larger cryptocurrency trades in an individual slot.
Additionally, the exchange sources prices for crypto reference rates from Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital. It is the world’s largest derivatives trading venue.
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Reference Rates at Heart of SEC Concerns
Recently, the US Securities and Exchange Commission (SEC) has cited the need for accurate pricing to approve Bitcoin (BTC) spot ETFs. So far, Coinbase has agreed to help some ETF applicants watch markets for irregular behavior.
Last year, Grayscale sued the SEC for refusing a spot Bitcoin ETF using the same price reference as several Bitcoin futures products. Given the prevailing regulatory uncertainty, industry experts expect a Grayscale win to precede the approval of several Bitcoin ETFs in the US.
Despite regulatory uncertainty at home, Purpose Investments’ Bitcoin ETF in Canada has attracted healthy US interest. Earlier this week, Jacobi Asset Management’s new Jacobi FT Wilshire Bitcoin ETF launched on Euronext Amsterdam.
In the meantime, Cboe Digital has received approval from the US Commodity Futures Trading Commission (CTFC) to offer leveraged margin trading of Bitcoin and Ethereum (ETH) futures.
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