According to Tim McCourt, Global Head of Equity Index and Alternative Investment Products at CME Group, “These new reference rates are intended to address the ever-evolving demands of players in the digital asset area. During the fourth quarter of 2021, the New York calculation window stood as the second most actively transacted hour for Bitcoin futures, trailing only the London rate. New York reference rates have turned out to be essential as several institutional customers utilize our Bitcoin and Ether future products in active managed portfolios or structured products such as ETFs because they enable market participants to analyze cryptocurrency price fluctuations with greater accuracy and precision with timing that is better linked to their portfolios and geographies.”
There will be two additional reference rates in addition to the CME CF Bitcoin Reference Rate (BRR) and CME CF-Ether Dollar Reference Rate (ETHUSD RR), which are released at 4 p.m. London time each day and serve as a benchmark price for bitcoin and ether. The BRR and ETHUS RR will remain as the reference rates for all CME Group Bitcoin futures, Micro Bitcoin futures, and Ether futures and Micro Ether futures contracts, respectively.
“The CF Benchmarks team is incredibly delighted to be able to present these two additional versions of the breakthrough CME CF Reference Rates for bitcoin and ether that correlate with the conventional market closure in North America,” stated Sui Chung, CEO of CF Benchmarks.
“With this new product, CME Group and CF Benchmarks have shown their mutual commitment to provide investors in the digital asset area with cutting-edge solutions. Institutional investors will only be encouraged to use digital assets if they have access to two of the most reputable and liquid benchmarks in the industry.”
BlockFi’s Global Head of Trading Joe Hickey stated that CME Group’s latest bitcoin and ether reference rates “will provide one more mitigation tool to the crypto currency market. When operating a 24-hour worldwide cryptocurrency company, it is necessary to have a geographical end-of-day (EOD) benchmark rate. This will provide us a new tool to monitor regional markets while also meeting the needs of BlockFi’s institutional clients for a liquid benchmark rate during New York hours.”