Chicago Mercantile Exchange & Chicago Board of Trade (CME Group Inc) announced a partnership with Crypto Facilities Ltd to list the price of ether in real-time dollars. Information from major cryptocurrency exchanges Bitstamp and Kraken will be used to determine the CME CF reference rate. This could be a hint of things to come for the second most popular crypto in the world, including possible US futures.
CME Strikes Deal for Ether-Dollar Reference Rate
“CME Group’s experience and knowledge in bringing the Bitcoin Reference Rate and Real-Time Index to market,” Chicago Merc’s website pithily stated, “has enabled us to launch an Ether-Dollar Reference Rate and Real-Time Index […] and the CME CF Ether-Dollar rates will provide a standardized reference rate and spot price index to bring confidence to any trading strategy. Major cryptocurrency exchanges Bitstamp and Kraken provide the pricing data to bring our dependable rate to the market.”
In the final quarter of last year, to much fanfare and hype, CME, along with crosstown rival Cboe, created a first of its kind: crypto futures. The experiment in running bitcoin core (BTC) in more mainstream financial contexts has been decidedly mixed. Some analysts even believe futures were a significant drag on digital asset prices due to allowing speculators to short BTC.
CME’s Tim McCourt explained, “The Ether Reference Rate and Real Time Index are designed to meet the evolving needs of this marketplace. Providing price transparency and a credible price reference source is a key development for users of Ethereum.”
Aiming for Institutional Investors
CME is among the most trusted derivatives market makers in the world, as is a well-known player. Crypto Facilities Ltd is a crypto trading platform. The two have teamed to offer the CME CF Ether-Dollar Reference Rate (Ether Reference Rate) and Ether Real Time Index. Crypto Facilities will rely upon Kraken and Bitstamp order books as principal references. It hopes to add something like a daily benchmark in US fiat, real-time. Rollout is expected by CME Group and Crypto Facilities’ respective websites May 14, but formal CME market data platform distribution won’t begin until June 4th of this year.
London-based Crypto Facilities’ Timo Schlaefer noted, “Ether, the second largest cryptocurrency, experienced incredible adoption and growth in 2017, evolving into the leading blockchain for smart contracts. We are excited to be contributing to the strong community that has developed around the Ethereum network by providing a reliable reference rate and real-time Ether-Dollar price.”
Earlier this week, Crypto Facilities detailed its other partnership with Chicago-based Akuna Capital and London-based market maker B2C2 in an effort to make ethereum futures contracts. The triumvirate hopes it can bring liquidity to ethereum futures. Aimed at institutional investors, such futures would allow long and short positions without dirtying hands (having to hold the actual coin).
Akuna’s Toby Allen insisted his company is “looking forward to seeing this much-needed product fill a gap in the market. The addition of a futures product enables crypto traders to take both long and short positions in ETH and is another giant leap in the development of the crypto asset class.”
Images: Images via Shutterstock, Pixabay, Ethereum, CME Group Inc.