CME Group, a leading derivatives marketplace, has announced the launch of Bitcoin (BTC) and Ether (ETH) reference rates specifically for the Asia Pacific region. This move further demonstrates the increasing institutional interest in cryptocurrencies coming from Asia.
Partnering with crypto indices provider CF Benchmarks, CME Group revealed that the two Asia Pacific-focused crypto reference rates will be launched on September 11th. Reference rates are widely recognized as reliable sources of a cryptocurrency’s price, and in the case of CME Group, they are used to determine settlements of crypto futures contracts.
Beginning September 11th, crypto institutions and investors based in Asia will have access to two reference rates tracking BTC and ETH. These rates will be published once a day at 4 pm Hong Kong time, allowing investors in the region to have a more convenient and precise tool for pricing their investments.
Although CME Group already has existing reference rates for BTC and ETH, these rates are published according to the timezones of New York and London. By introducing Asia Pacific-specific reference rates, CME Group aims to cater to the growing demand from Asian institutions and investors seeking accurate crypto prices during their trading day.
Giovanni Vicioso, CME’s head of crypto products, noted that this year, 37% of crypto volume traded on the platform has occurred during non-U.S. hours, with 11% originated from the Asia Pacific region. Vicioso emphasized that the introduction of APAC reference rates will enable market participants to hedge cryptocurrency price risks more accurately, aligning the timing with their portfolios.
Markus Thielen, Head of Research at Matrixport, believes that the availability of these reference rates will have a significant impact on the demand for investor products offered by institutions. He anticipates that end investors will now be more attracted to these products as they can benefit from the precise pricing information provided by the daily reference rates.
In addition to BTC and ETH reference rates, CME Group and CF also offer reference rates and real-time indexes for metaverse-related tokens, such as Axie Infinity Shards (AXS), Chiliz (CHZ), and Decentraland (MANA). The firm’s reference rates aggregate trade flows from various crypto spot exchanges, including Bitstamp, Coinbase, Gemini, and Kraken, aiming to provide reliable reference prices.
Notably, institutions have been increasingly exploring crypto-friendly jurisdictions like Hong Kong and Singapore. These regions have taken significant steps to provide regulatory clarity for cryptocurrency businesses, making them attractive hubs for institutional investors.
With the introduction of Asia Pacific reference rates, CME Group further strengthens its position as a leading provider of cryptocurrency derivatives, catering to the evolving needs of institutional investors in the dynamic Asia Pacific market.
In conclusion, CME Group’s collaboration with CF Benchmarks to launch Bitcoin and Ether reference rates specifically for the Asia Pacific region reflects the growing institutional interest in cryptocurrencies from Asia. The availability of these reference rates will provide market participants in the region with a credible source for pricing their crypto investments, enabling more precise hedging and attracting greater demand for investor products. This move aligns with the trend of institutions seeking regulatory clarity in crypto-friendly jurisdictions like Hong Kong and Singapore. Overall, it showcases CME Group’s commitment to serving the evolving needs of institutional investors in the Asia Pacific market.