CME Group has launched their real time bitcoin price index. This is exciting news for the crypto currency markets and also exciting for derivatives traders. With many different bitcoin exchanges operating worldwide, there is a need to find a reliable standardized reference price that market participants can use to price derivatives instruments. Coinut.com has done a good job in my opinion at providing an index that aggregates and weights a number of bitcoin prices from various exchanges. The CME CF Bitcoin Real Time Index takes transparency a step further. This is better than relying on other indexes like CoinDesk’s alone.
With the CME, market participants will know they are dealing with a transparent rules based index that is professionally managed and meets industry best practices. This will give the market greater confidence to price derivatives contracts accordingly.
The next step to watch is whether the CME can list USD cash settled contracts on this index. Obviously, index integrity needs to be tested before trading can take place.
http://www.wsj.com/articles/bitcoin-futures-might-be-coming-soon-1479143252
http://www.coindesk.com/cme-group-launches-bitcoin-price-indexes/
