CME Group to launch BTC, ETH reference rates aimed at Asia’s investors

CME reported nearly half of its crypto volume year to date came from non-U.S. trading hours and around 11% from the Asia Pacific region.

Derivatives marketplace CME Group is launching Bitcoin (BTC) and Ether (ETH) reference rates for the Asia Pacific region, in another sign of growing institutional interest in crypto from Asia.

On Aug. 16, derivatives marketplace CME Group said it’s partnered with crypto indices provider CF Benchmarks and on Sept. 11 to launch the two Asia Pacific-focused crypto reference rates.

Reference rates are used as a credible source of a cryptocurrency’s price and are used — in CME’s case — to price settlements of crypto futures contracts.

CME Group said from Sept. 11, Asia-based crypto institutions and investors will get two reference rates that will track BTC and ETH, which will be published once a day at 4 pm Hong Kong time.

CME Group has existing reference rates for the two cryptocurrencies, but they are published at times more suitable to investors in New York and London’ timezones. 

CME CF APAC Bitcoin and Ether Reference Rates launch Sept. 11, providing daily prices at 4 p.m. HKT and SGT and complementing existing London and New York time rates. https://t.co/j3r7yCfe45 pic.twitter.com/6tOadpk51M

— CME Group (@CMEGroup) August 17, 2023

CME’s crypto products head Giovanni Vicioso said so far this year it’s seen 37% of its crypto volume traded during non-U.S. hours with 11% coming from APAC.

“These APAC reference rates will allow market participants to more accurately and precisely hedge cryptocurrency price risk with timing more closely aligned to their portfolios,” Vicioso said.

Matrixport Head of Research Markus Thielen told Cointelegraph the reference rates show that CME is seeing increased demand from institutions requiring accurate BTC and ETH prices during the Asia trading day.

Institutions will use the daily price for investor products — which he believes could now see greater demand from the end investors of those institutions.

Related: From the U.S. to Japan, regulators are beginning to embrace crypto

CME and CF also has reference rates and real-time indexes for the metaverse-related tokens Axie Infinity Shards (AXS), Chiliz (CHZ) and Decentraland (MANA).

The firm’s other reference rates aggregate crypto spot exchange trade flows including from Bitstamp, Coinbase, Gemini and Kraken and aim to provide a credible reference price.

Such rates are used in the settlement of futures contracts including CME’s Bitcoin and Ether futures products, which settle on its London time reference rate.

Institutions have been eyeing crypto-friendly jurisdictions such as Hong Kong and Singapore — two regions that have made significant moves to give regulatory clarity to crypto businesses.

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