BlackRock joins forces with Kraken’s CF Benchmarks for Bitcoin price indexing

    03 Sep 2022

    BlackRock will use Kraken’s CF Benchmarks Bitcoin index pricing product for its first crypto offering. Previously, the world’s biggest asset manager launched its own Bitcoin private trust following announcing a partnership with Coinbase.

    As The Block reported, BlackRock’s Bitcoin product will be benchmarked using CF Benchmark’s indexes. 

    CF Benchmarks is a member of the Crypto Facilities Group, part of the Payward Group, which owns and operates Kraken, one of the oldest and largest crypto exchanges. 

    Sui Chung, CF Benchmark’s CEO said that institutions are increasingly showing interest in crypto, despite the current bear market.

    “The understanding of digital assets themselves is much greater than it was, people we talk to now understand the difference between Bitcoin and Ether,” he noted. “People no longer lump Bitcoin and ether into the same bucket and are more aware of the fundamentals of the assets.”

    Chung told The Block the firm’s agreement with BlackRock has been in the works since 2021.

    “They wouldn’t launch a product unless there was demand,” the CEO added.

    The agreement with BlackRock has been in the works since 2021, Chung said.

    They wouldn’t launch a product unless there was demand, Chung said. Firms like BlackRock don’t do this sort of thing as a “kite flying exercise, because let’s face it, it’s not a decision that carries no risk.” 

    This isn’t BlackRock’s first exposure to Bitcoin. The firm’s Global Allocation fund revealed in early 2021 that it had gained some exposure to Bitcoin, through the CME’s Bitcoin futures offering, per a filing – these trades are cash-settled and use CF Benchmarks reference rates. 

    Last month, Blackrock also partnered with Coinbase to launch its institutional grade Bitcoin trust. It allows investors to trade and custody of Bitcoin on Blackrock’s platform, with help from Coinbase Prime

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