The “CF Benchmarks Ultra Cap 5” Cryptocurrency Index is the first true beta benchmark for crypto, covering about 75% of the entire crypto market
LONDON, 19 August 2020 -- CF Benchmarks, the leading cryptocurrency index provider, has launched an index that accurately reflects the circulating supply of each comprising crypto (or index constituent). The CF Benchmarks Ultra Cap 5 is fully rules-based and free float market capitalisation weighted. The index represents more than 75% of the entire crypto asset class’s market capitalisation and is calculated every second, 24/7, 365 days a year. Investors now have a true gauge of crypto market beta. Additionally, financial services providers can use the new index to create investment products with a UK FCA-regulated benchmark.
“In a first for the industry, we are proud to provide a unique index whose strengths include transparency, market readiness and regulatory integrity. We are excited and proud to be able to provide the market with a reliable measure of crypto market performance that can pave the way for regulated financial products that reference a crypto portfolio,” said CF Benchmarks CEO, Sui Chung. “All aspects of the CF Ultra Cap 5 Index’s calculation, maintenance and governance are transparent. The new index can immediately be replicated by a passive fund or ETF or used for measuring relative performance of an active fund with minimal tracking error and trading costs.”
Commenting on the news Will Cai, a partner at investment manager Wilshire Phoenix, remarked: “With the crypto space garnering increased attention from large institutions, CF Benchmarks’ indices are elevating standards of price integrity and regulatory governance in the asset class, providing tools and products that are transparent and robust. CF Benchmarks’ Bitcoin Reference Rate (CME CF BRR) was a trailblazer in crypto benchmarks and we use it with confidence in our own products. We are looking forward to CF Benchmarks’ new portfolio index offering."
The new index has a market capitalisation of $226.5bn at launch, to put this into context when the UK equity benchmark FTSE-100 was launched in January 1984 its market capitalisation was just £100bn ($402bn in 2020 when adjusted for inflation), showing just how far cryptocurrencies have come in a little over 10 years. The new index and its constituent prices are all regulated benchmarks and calculated through proprietary methodologies, validated by research and development and honed by the group’s unmatched experience of index construction. Critically, these methodologies include liquidity screening to ensure smooth replication and free-float weighting to maintain constituent weights proportionate to the amount of cryptocurrency readily available for trading. The full index methodology, ground rules and governance documentation can be found here.
As well as helping to develop the financial ecosystem around crypto assets, the new index also enables the wider financial community to follow the performance of the asset class through a simple index value that is free of the regulatory and integrity questions that dog other indices. This will greatly alleviate frictions around measuring the market and its dynamics that institutional investors often encounter when trying to analyse this asset class.
To learn more, please visit www.cfbenchmarks.com/cfuc5tr_usd
About CF Benchmarks
CF Benchmarks is the leading provider of cryptocurrency benchmark indices, authorised and regulated by the UK FCA under EU BMR. Its benchmark indices are provided through public methodologies and transparent governance, for tracking, valuing and settling risk in cryptocurrency financial services and products. CF Benchmarks’ indices have been used to settle over $200bn of cryptocurrency derivative contracts listed for trading by CME Group and Kraken Futures. They are also used by Wisdom Tree as the Indicative NAV for its Switzerland-listed Bitcoin ETP. To learn more, please visit www.cfbenchmarks.com
Contact: Sui Chung, CF Benchmarks – [email protected] - +44 207 655 6099
Disclosure - CF Benchmarks Ltd. is a wholly owned subsidiary of Kraken, a provider of input data to the indices produced by CF Benchmarks