CME Group, a derivatives exchange, is launching two new reference rates for Bitcoin and Ether on Feb. 28.
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The two reference rates are the CME CF Bitcoin Reference Rate New York (BRRNY) and CME CF Ether-Dollar Reference Rate New York (ETHUSD_NY). They will provide a once-a-day reference rate of the U.S. dollar price of the two digital assets, published at 4 p.m. ET.
“These new reference rates are designed to meet the ever-evolving needs of participants in the digital asset space,” Tim McCourt, global head of equity index and alternative investment products, CME Group, said. “In Q4 2021, the New York calculation window was the second-most traded hour for Bitcoin futures behind the London rate. As we continue to see more institutional clients use our Bitcoin and Ether futures products in active portfolios or structured products like ETFs, these New York reference rates become increasingly important as they allow market participants to more accurately and precisely assess cryptocurrency price risk with timing more closely aligned to their portfolios and regions.”
These new reference rates will complement the existing CME CF Bitcoin Reference Rate (BRR) and CME CF-Ether Dollar Reference Rate (ETHUSD_RR). These provide a daily benchmark price for bitcoin and ether in U.S. dollars, published at 4 p.m. London time. The BRR and ETHUS RR will continue to serve as the benchmark rates for settlement of all CME Group Bitcoin futures, Micro Bitcoin futures and Ether futures and Micro Ether futures contracts, respectively.
“The CF Benchmarks team is immensely proud to be able to provide these two new versions of the groundbreaking CME CF Reference Rates for bitcoin and ether that synchronize with the traditional market close in North America,” Sui Chung, CEO of CF Benchmarks, said. “This launch is testament to the joint commitment of CF Benchmarks and CME Group to deliver innovative solutions to investors in the digital asset space. Providing variants of two of the most trusted and liquid benchmarks in the space will serve only to further accelerate adoption for digital assets amongst institutional investors.”
Joe Hickey, global head of trading at BlockFi, said the new reference rates will add another risk management tool to the digital asset marketplace.
“When you run a 24/7 global crypto business, you need a regional end-of-day benchmark rate. This will help fill BlockFi’s institutional client demand for a liquid benchmark rate during New York hours, while also providing a new way for us to monitor the markets regionally,” Hickey said.
CME Group is the world’s leading derivatives marketplace for futures, options, cash, and OTC markets, among others. It offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec, and foreign exchange trading on the EBS platform.