During the last couple of months, there has been an increase in the activity of trading bitcoin, which is essential for the development of the digital currency. According to recent reports, it seems like the CME Group, which has reportedly been looking for ways to strengthen their digital foothold, will begin publishing bitcoin market prices, updated in real time.
Based on this, the project, known by the name of The Bitcoin Real Time Index will launch in the fourth quarter of this year. While it’s quite far away, it’s important to note the importance of this decision. According to the CME Group, the index will be based on global demand for buying and selling bitcoin, which will then be reflected in U.S. dollars. The CME Group has also partnered up with a bitcoin-based company known by the name of Crypto Facilities, which is a digital asset trading platform that will handle all the calculations required for the index. In their recent press release, the CME Group also stated that the price will be updated once every second, while also having a daily settlement price, known as the Bitcoin Reference Rate published daily.
According to Sandra Ro, the executive director and digitization head for the group, “These products are designed to allow bitcoin traders, companies and other users to rely on a credible reference rate price source".
At this moment in time, it seems like the calculation system will be based on pricing data retrieved from various bitcoin exchanges and bitcoin trading platforms, such as Kraken, Coinbase and Bitstamp.
Later on, it seems like the two companies will team up with The Imperial College of London, which will oversee the Bitcoin Reference Rate. Additionally, a code of conduct will be developed for the participants, as a way of making sure that the partnership alongside with the actual Bitcoin Real Time Index keeps its integrity.
This move represents a great step forward for Chicago, which is the state from where the CME Group originates, but also from other areas from all around the world. Having a daily price on which people can bet their money on may be able to simplify trading. Another major benefit of the move would be the digitization of the group, considering the fact that last year, they closed most of their trading pits, and ought to look for other ways of making a profit in the long run.
Based on everything that has been outlined so far, what do you personally think about the CME Group Bitcoin Real Time Index initiative? Will this benefit the digital currency market in any way? Let us know your thoughts in the comment section below.