Hi HODLers,
The CME Group, which runs the Chicago-based derivatives exchange which is the biggest Futures Market in the world, has teamed up with CF Benchmarks, a cryptocurrency index provider, to roll out the new rates on April 25.
You may ask: "What is a reference rate"?
A reference rate is price data for an asset. It is a data feed and is a prerequisite for a future ETF or derivative product.
The new reference rates will include index pricing for:
- Algorand (ALGO),
- Bitcoin Cash (BCH),
- Cardano (ADA),
- Chainlink (LINK),
- Cosmos (ATOM),
- Litecoin (LTC),
- Polkadot,
- Polygon (MATIC),
- Solana (SOL),
- Stellar Lumens (XLM) and
- Uniswap (UNI).
This is quite an extensive list! I would have expected a few but definitely not 11 altcoins.
I have to say there are a lot of names that I would not have picked for many different reasons. As a fan of Fantom (FTM), I am kind of disapointed it did not make the cut.
There is one common denominator for most of these names, a LOT of VC money in most of them or centralized control. Definitely not my cryptocurrency ethos but I guess decentralization has become secondary...
Tim McCourt, CME’s head of equity and FX products:
“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,”
Last week I published this post: CME Group looking to offer Solana and Cardano futures! Seriously?
I guess I nailed it, they just want volumes and wash trades to make money on the fees. Who cares about fake or dead projects right?
They are clearly pushing their narrative of being the future place to trade crypto and are definitely seeing a lot of institutional investor interests if they move that fast.
Let's not forget one thing: Futures and ETFs make it easier to short cryptocurrencies and in this case, altcoins.
Remember that during the end of the bull market in 2017-2018 happened just after futures were launched. They allowed traders/institutional investors to pop the short-term price-bubble.
Stay safe out there,
Sincerely,
