CME Group has launched a cryptocurrency price index for Ether. The index and reference rate to be calculated by Crypto Facilities will provide the Ether price and benchmark in real time based on transactions on Kraken and Bitstamp.
The Ether-Dollar Reference rate “will provide a daily benchmark price in U.S. dollars at 4 pm London time, and Ether Real Time Index, which will allow users access to a real-time Ether price in U.S. dollars,” according to a CME press release.
The move clears the path for CME to eventually introduce ethereum futures on its platform. This could provide more exposure to more institutional investors who do not wish to directly trade in cryptocurrencies.
CME, the largest futures exchange globally was one of the first institutions to make an entry into cryptosphere when it introduced bitcoin futures contracts in December 2017. Since then, several financial institutions including Goldman Sachs and ICE, NYSE’s parent company have expressed in the highly volatile but otherwise lucrative market.
“The Ether Reference Rate and Real Time Index are designed to meet the evolving needs of this marketplace,” said Tim McCourt, Managing Director and Global Head of Equity Products and Alternative Investments at CME Group.
“Providing price transparency and a credible price reference source is a key development for users of Ethereum,” he said.
Timo Schlaefer of Crypto Facilities noted that Ethereum had evolved into a leading blockchain for smart contracts.
“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,” he said.
Ether is the native token on the Ethereum network and is the second largest cryptocurrency by market capitalisation. Its main selling point is the smart contract functionality. Ethereum enjoyed unprecedented growth last year with many ICOs launching on the platform.