A&O Shearman | FinTech | CME and Bloomberg Launch Virtual Currency Indices
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  • CME and Bloomberg Launch Virtual Currency Indices

    Three new indices tracking various virtual currencies could be a signal that the asset class is one step closer to mainstream acceptance.  The CME Group launched the Ether Reference Rate (ERR) and the Ether Real Time Index (ERTI) with Crypto Facilities Ltd., which track the performance of Ether against USD.  Bloomberg also launched the Bloomberg Galaxy Crypto Index with Galaxy Digital Capital Management LP, which tracks a basket of leading virtual currencies against USD.

    While CME and Crypto Facilities already operate similar indices for Bitcoin—the Bitcoin Reference Rate (BRR) and the Bitcoin Real Time Index (BRTI)—the indices in respect of Ether, the second largest cryptocurrency by market capitalization, signal increased investor interest in alternative virtual currencies.  The ERR and ERTI are available now, and will be distributed by the CME Group’s market data platform starting June 4, 2018.

    The Bloomberg Galaxy Crypto Index was launched on May 9, 2018. It tracks the performance of ten cryptocurrencies in USD. The Bloomberg Galaxy Crypto Index is available now via the Bloomberg Terminal.

    Indices are important because they allow for reliable benchmarks to gauge price and performance across virtual currency assets, which allows for more sophisticated asset strategies to be employed in the space. Reliable pricing sources are also a necessary condition for large scale institutional investors to engage in virtual currency investment strategies. The introduction of these indices brings greater transparency to the virtual currency marketplace.