Kraken’s subsidiary, CF Benchmarks, is currently engaged in discussions with 50 different firms seeking its services for spot Bitcoin exchange-traded fund (ETF) pricing.
This development comes in the wake of the recent green light given by the US Securities and Exchange Commission (SEC) to 11 spot Bitcoin ETF applications.
A report from Financial News reveals that CF Benchmarks is supplying crucial data to major players in the financial industry, including BlackRock and Franklin Templeton.
At present, six out of the eleven approved spot Bitcoin ETF providers are relying on CF Benchmarks’ index to monitor pricing data from various exchanges that meet strict criteria.
Although approximately half of the firms in talks with CF Benchmarks hail from the United States, the rising interest from Europe and Asia signifies a global shift, with regulatory developments in the US having a ripple effect worldwide.
As the regulatory landscape continues to evolve, asset managers and banks are at the forefront of this wave, actively exploring spot Bitcoin ETF pricing to capitalize on the burgeoning cryptocurrency market.
The recent SEC approval has triggered a frenzy among investors, with trading volumes for spot Bitcoin ETFs skyrocketing to an impressive $7.7 billion on January 11 and 12, marking an auspicious start for this financial instrument.
Sui Chung, the CEO of CF Benchmarks, acknowledged this initial success, but also emphasized the importance of maintaining realistic expectations.
Chung envisions a gradual increase in inflows as more distribution channels open up in the coming months and years.
He has revealed a strategic expansion plan for CF Benchmarks, which will involve growing the team by around 50%, spanning across technology, index design, and product management.
Meanwhile, the highly anticipated launch of spot Bitcoin ETFs in the US recently led to a significant correction in the price of Bitcoin, plummeting by approximately 10%.
Despite widespread anticipation that these ETFs would democratize access for both retail and institutional investors, the market’s response within the initial 48 hours was rather tepid, with only $1.4 billion in new funds flowing into the ETFs, as reported by Finance Magnates.
Surprisingly, the 11 newly introduced spot Bitcoin ETFs attracted a mere $1.4 billion in new funds.
However, the Grayscale Bitcoin ETF, converted from the Grayscale Bitcoin Trust, experienced a substantial outflow of $579 million, signaling an unexpected turn of events in the cryptocurrency market.