According to CME, non-U.S. trading hours have accounted for about half of its cryptocurrency activity this year, while the Asia Pacific area has contributed around 11%.
The major derivatives marketplace CME Group has announced its strategic alliance with CF Benchmarks, which is an interesting move that highlights the growing institutional interest in cryptocurrencies in the Asia-Pacific area. By introducing reference prices for Bitcoin (BTC) and Ethereum (ETH), two of the most popular cryptocurrencies, specifically for the Asia-Pacific region, the cooperation highlights the growing need for reliable crypto pricing solutions that work across time zones.
The newly announced reference rates, which are expected to go live on September 11th, will provide Asia-based crypto institutions and investors with a dependable and accurate source to estimate the prices of BTC and ETH.
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/j3r7yCfe45pic.twitter.com/6tOadpk51M
— CME Group (@CMEGroup) August 17, 2023
Every day at 4 p.m. Hong Kong time, these rates will be released, enabling market players to make wise choices during the region’s trading hours. This action responds to the demand for pricing that is more exact and consistent with regional market conditions.
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Meeting Institutional Demands
The importance of non-U.S. trading hours in the cryptocurrency market is being stressed by Giovanni Vicioso, Head of Crypto Products at CME. Notably, 11% of CME’s crypto volume this year came from the Asia-Pacific area, and 37% of it was transacted outside of US trading hours. CME Group wants to give institutional participants the power to more effectively manage their bitcoin price risk by establishing reference rates that are tailored to this time zone.
Furthermore, as it improves the precision and timeliness of daily pricing utilized for investor products, this endeavor may be advantageous for end investors. Precise pricing strategies like these reference rates are becoming increasingly important instruments to manage risk and exposure as the bitcoin market continues to develop and draw larger institutional participation.
Axie Infinity Shards, Chiliz (CHZ), and Decentraland (MANA), among other tokens related to the metaverse, are now included in the reference rates and real-time indexes created by CME Group and CF Benchmarks in addition to Bitcoin and Ethereum.
This comprehensive methodology aims to ensure precise and reliable reference points for various trading instruments while also offering a solid foundation for the developing cryptocurrency derivatives landscape.
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Along with Bitcoin and Ethereum, the reference rates and real-time indices developed by CME Group and CF Benchmarks now include Axie Infinity Shards, Chiliz (CHZ), and Decentraland (MANA), among other tokens related to the metaverse. This thorough technique seeks to provide accurate and trustworthy reference points for different trading instruments while also providing a strong framework for the emerging bitcoin derivatives market.