BlackRock to use Kraken subsidiary’s Bitcoin price indexing for crypto offering
The world’s largest asset management company, BlackRock, plans to use the Kraken CF Benchmarks Bitcoin index pricing product for its first cryptocurrency offering. Over the past few months, BlackRock has accelerated its crypto plans, including a partnership with Coinbase.
BlackRock to use CF benchmarks Bitcoin price indexing
The CEO of CF Benchmarks, Sui Chung, told The Block that BlackRock’s Bitcoin product would be benchmarked using the CF Benchmark’s indexes. CF Benchmarks is a subsidiary of Kraken, which is one of the oldest and largest crypto exchange firms.
CF Benchmarks is attempting to dominate the crypto indexing sector following a rise in the demand for crypto assets by institutional investors despite the bear market. However, CF Benchmarks is not the only company focused on developing crypto indexes. In 2021, S&P Dow Jones Indices released new cryptocurrency indexes.
CF Benchmarks is among the members of the Crypto Facilities group of companies, and it was launched five years ago. CF Benchmarks had only one client during its launch, the Chicago Mercantile Exchange. The firm now has many clients worldwide, such as Hashdex and WisdomTree.
Chung also said there had been a rise in institutional interest in cryptocurrencies in recent months compared to the beginning of the year. He also noted an increased understanding of digital assets, and people now understood the differences between different tokens and the fundamentals of each one.
According to Chung, the agreement between BlackRock and CF Benchmarks has been underway since 2021. He said that the product had witnessed increasing demand, and the announcement by BlackRock that it would use the index was proof of this demand.
BlackRock’s interest in crypto offerings
One of the notable developments in recent months is the partnership between BlackRock and Coinbase, the largest cryptocurrency exchange in the United States. In August, BlackRock announced a partnership with Coinbase to launch an institutional-grade Bitcoin trust.
The trust in question allowed investors to buy Bitcoin and custody it on the BlackRock Platform. The offering would be made possible through Coinbase Prime. The partnership news triggered excitement across the crypto market, with the founder and managing partner of SkyBridge, Anthony Scaramucci, predicting that the product would boost an overwhelming demand for Bitcoin.
BlackRock’s exposure to the crypto market has not only happened in the past couple of months. In early 2021, the BlackRock Global Allocation fund showed that the asset management firm had gotten exposure to Bitcoin via the CME Bitcoin futures offering. The trades in question are settled in cash, using the reference rates provided by CF Benchmarks.