CME Group expands bitcoin, ether reference rates to Asia
37% of CME Group’s total crypto volume has traded outside of US hours, with 11% coming from the APAC region
JHVEPhoto/Shutterstock, modified by Blockworks
Derivatives marketplace CME Group is set to launch reference rates for bitcoin and ether catered toward Asian investors — a variant to existing rates focused on those in London and New York.
Developed with index provider CF Benchmarks, the CME CF Bitcoin Reference Rate APAC and CME CF Ether-Dollar Reference Rate APAC are set to be available on Sept. 11, the companies revealed Wednesday.
So far in 2023, 37% of CME Group’s total crypto volume has traded outside of US hours, according to Giovanni Vicioso, the company’s global head of cryptocurrency products. About 11% of trades come from the Asia Pacific (APAC) region.
CME launched its Bitcoin Reference Rate (BRR) — a daily reference rate of the US dollar price of one bitcoin as of 4 pm London time — in 2016. It followed that up with an Ether Reference Rate in 2018.
The BRR aggregates trade flow of major bitcoin spot exchanges during a one-hour window before taking the average of the volume-weighted medians across the 12 five-minute intervals of that span.
This calculation “ensures tradability and replicability in the underlying spot markets,” according to the company.
CME Group launched BTC and ETH reference rates to be published at 4 pm New York time in February 2022.
The upcoming rates will be published at 4 pm Hong Kong and Singapore time.
“As we continue to see more institutional clients use our bitcoin and ether futures products in active portfolios or structured products like ETFs, 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 in a statement.
The CME Group offering expansion came the same day Coinbase revealed it was cleared to offer eligible US customers access to regulated crypto futures directly from its platforms. The global crypto derivatives market represents roughly 75% of global crypto trading volume, the crypto exchange said.
The average daily volume for CME Group’s crypto futures during the second quarter amounted to 38,600 contracts, while open interest averaged 79,200 contracts.
CME Group noted in a July report that the number of large open interest holders of bitcoin futures — defined as an entity that holds at least 25 futures contracts — averaged a record of 107 during the quarter.
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