Author – Sam
Chicago-based CME group is living to the expectations of a large derivatives exchange company of its caliber. The operator is making preparations for a major milestone in the trading of a product in the ethereum futures.
The exchange has developed an Ether Real Time Index as well as an Ether Reference rate. These two indices will facilitate the auditing and standardization of data for the trading pair- ETH/USD. Also, the indices will provide day-to-day benchmark price. The creation of the index has been a culmination of collaborative efforts with major cryptocurrency exchanges.
Crypto Facilities, which is a trading platform in the UK, will be responsible for the calculations of both the Ether Real Time Index and the Ether Reference Rate. It is worth noting that Crypto Facilities recently pioneered the first ever regulated product in ethereum futures. On the other hand, two cryptocurrency exchanges will provide Pricing data. The two are Bitstamp from Luxembourg and Kraken from San Francisco.
According to Tim McCourt, who serves as CME group’s managing director as well as the group’s head of equity products and alternative investments, the indices have been designed in such a way as to address the growing needs of the marketplace. Tim also added that having a credible and transparent source of price reference is a major development for people who use Ethereum.
Crypto Facilities’ CEO, Dr. Timo Schlaefler, noted that on top of Ether being the second largest currency among the cryptocurrencies, Ether was incredibly adopted by many and registered growth in the year 2017. “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,” Dr. Timo added.
This latest development at CME group now means that ethereum futures will now be listed on CME’s trading platform. On December 2017, CME launched the first product, in their trading platform on cryptocurrency futures. The creation of the indices has two implications. First, cryptocurrency miners will now be in a position to hedge profits in a more effective way. The other implication will be that institutional investors will be more exposed to the new asset class.
CME appears to position itself as a leader in cryptocurrency trading. Back in 2016, CME launched both a pricing index and reference rate for bitcoin. More than a year later, CME became the second exchange in the United States to list a bitcoin futures product which has progressively registered a gradual increase in trading volumes.