Tuesday, November 29, 2022

Breaking: CME Group Bullish On Altcoins, To Launch New Benchmarks

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Updates to remove references to futures. CME has not launched new futures instruments. 

Exchange operator CME Group said on Thursday it will launch 11 new indexes that will track the most popular altcoins, including staples such as Cardano and Solana. The indexes are in partnership with crypto index operator CF Benchmarks, and will launch later in April.

The firm will launch 11 products that will track some of the biggest altcoins, including Solana (SOL), Cardano (ADA), Polygon (MATIC), Polkadot (DOT), Stellar Lumens (XLM) and Uniswap (UNI). The move is a first for mainstream crypto indexes, which have so far largely tracked top coins Bitcoin (BTC) and Ethereum (ETH).

CME’s Bitcoin and Ethereum futures are the most popular derivatives in the market, and are used as a basis for the biggest exchange traded funds. Today’s move is likely to drive a host of new instruments centered around altcoins, and is expected to spur more capital inflows.

Growing demand for altcoin indexes

CME said in a press release that it saw increased demand for altcoins amid growing institutional interest in the crypto market. The exchange operator plans to collaborate with several major crypto exchanges, including Bitstamp, Coinbase, Gemini, and Kraken, to provide data for the indexes.

As the digital asset market continues to expand, there is an increasing demand for reliable, standardized cryptocurrency pricing information based on robust, regulated reference rates.

Tim McCourt, CME Group Global Head of Equity and FX Products

The new indexes are not tradable futures products. Rather, they will provide reference rates and the real time U.S. dollar price of the tokens. CME has so far not launched any products providing altcoin futures.

While digital asset managers such as Grayscale already have specialized indexes that track altcoins, CME is by far the biggest entrant to the space.

Altcoins see growing institutional demand

CME’s foray into altcoins reflects the growing demand for non-BTC and ETH tokens seen this year. The latest bull run saw top altcoins largely outpace their more established peers.

Trading patterns in major altcoins, such as large transactions, indicate that institutional interest is also picking up.

Several other U.S. asset managers have also launched altcoin-related products for investors. Grayscale recently launched a non-ETH smart contracts fund consisting entirely of altcoins, while Coinshares launched an exchange-traded product that tracks Solana staking.

Disclaimer

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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