CME Added Reference Rates For Cardano, Solana And Polygon

CME added reference rates for Cardano, Solana, and Polygon but also it will offer reference rates for 11 altcoins as a prerequisite for ETFs and derivatives so let’s read more in our latest altcoin news today.

Cardano, Solana, DOT, and other altcoins will have reference rates and real-time indices that can lay the groundwork for more ETFs and derivative products by the end of the Month. The CME added reference rates for these altcoins recently and it runs the Chicago-based derivatives exchange that goes by the same name and partnered with CF Benchmarks which is a crypto index provider and will roll out the new rates on April 25.

The new reference rates will include index pricing for Bitcoin Cash, Algorand, Cardano, Cosmos, Chainlink, Litecoin, Polygon, Polkadot, Solana, Uniswap, and Stellar Lumens. The reference rates and indies are not tradeable investment products but as the name suggests, the reference rate is price data for an asset having this data available is a huge prerequisite for offering products like futures contracts and ETFs. At launch, the price data for the indices will be provided by coinbase, Gemini, bitstamp, Kraken, and itBit. Tim McCourt, the CME Head of Equity said:

“These new benchmarks, which capture 90% of the total investable cryptocurrency market cap today, are designed to allow traders, institutions and other users to confidently and more accurately manage cryptocurrency price risk, price portfolios or create structured products like ETFs.”

ETFs bundle together assets and sell shares to the investors and it is a way to get exposure to the underlying assets without having to own them directly. The Futures contracts speculate on the price of the asset which can be anything from stock, commodity, or cryptocurrency. There’s a reason to believe CME will not wait as long to increase the crypto product offerings. Payal Shah, the CME director of equity said last week that the group is looking at offering more futures contracts for Solana and Cardano.

CME offers Bitcoin and ETF Futures which can be purchased in denominations one-tenth the size of BTC and ETH. Micro BTC futures launched last may and generated about 5 million contracts according to Shah:

“In the few years—just over four years—since we launched our initial futures contract, the standard Bitcoin future with five-time multiplier, we’ve seen that grow from doing 1,000 contracts a day to now 10,000 a day. That growth is mind-boggling.”