- CME Group introduces new Ether and Bitcoin futures reference rates, allowing traders to hedge against volatility based on risk appetite.
- The reference rates will be published daily at 4 pm Hong Kong time starting September 11 and will cater to Asia-based crypto institutions and investors, enabling more accurate risk hedging aligned with local trading hours.
CME Group, a derivatives marketplace, has launched Bitcoin BTC and Ether ETH reference rates for the Asia Pacific region, indicating growing institutional interest in crypto from Asia.
CME Group announced on August 16 that it has partnered with crypto indices provider CF Benchmarks and will launch two Asia Pacific-focused crypto reference rates on September 11.
In the case of CME, reference rates are used to price settlements of crypto futures contracts and are used as a credible source of a cryptocurrency’s price.
CME Group announced that beginning September 11, Asia-based crypto institutions and investors will have access to two reference rates that track BTC and ETH and will be published daily at 4 pm Hong Kong time.
CME Group already publishes reference rates for the two cryptocurrencies, but at times more convenient for investors in the New York and London timezones.
Giovanni Vicioso, CME’s crypto products head, stated that 37% of its crypto volume was traded during non-US hours this year, with 11% coming from APAC.
“These APAC reference rates will allow market participants to hedge cryptocurrency price risk more accurately and precisely with timing more closely aligned to their portfolios,” Vicioso said.
According to Markus Thielen, Head of Research at Matrixport, 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 will now see increased demand from those institutions’ end investors.
CME and CF also provide reference rates and real-time indexes for the metaverse tokens Axie Infinity Shards (AXS), Chiliz (CHZ), and Decentraland (MANA).
Other reference rates offered by the firm aggregate crypto spot exchange trade flows from Coinbase, Gemini, Bitstamp, and Kraken to provide a credible reference price.
Such rates are used to settle futures contracts, such as the CME’s Bitcoin and Ether futures products, which are settled using the London time reference rate.
Institutions have been looking at crypto-friendly jurisdictions like Hong Kong and Singapore, which have made significant moves to provide regulatory clarity to crypto businesses.
