CF Benchmarks, Kraken’s Index Provider, Dominates Global Bitcoin ETF Market

CF Benchmarks, Kraken’s index provider, dominates the global Bitcoin ETF market, managing benchmarks underlying $24 billion worth of assets predominantly focused on Bitcoin.

In a significant development within the cryptocurrency space, CF Benchmarks, the digital assets index provider affiliated with leading U.S. crypto exchange Kraken, has emerged as a key player in the rapidly expanding market for spot-Bitcoin exchange-traded funds (ETFs). Amidst a surge in Bitcoin ETF activity globally, CF Benchmarks has solidified its position by providing reference data for a substantial portion of these funds, managing benchmarks that underpin approximately $24 billion worth of assets, predominantly focused on Bitcoin.

This year witnessed a remarkable uptick in Bitcoin ETF launches, starting with initiatives in the United States in January and recently expanding to Hong Kong, as reported by Bloomberg. CF Benchmarks has been instrumental in facilitating this growth, earning licensing fees from these funds, which escalate in tandem with the funds’ asset accumulation. Notably, BlackRock’s U.S.-based ETF, accounting for $15.9 billion in assets under management, relies on CF Benchmarks’ indices.

Commanding roughly half of the crypto benchmarking market, CF Benchmarks has extended its reach to collaborate with newly introduced Bitcoin ETFs in Hong Kong. Sui Chung, CEO of CF Benchmarks, expressed intentions to expand into other regions with significant crypto adoption, citing South Korea and Israel as potential targets.

The performance of CF Benchmarks has exceeded expectations, particularly in the U.S., where assets for spot-Bitcoin ETFs utilizing its indexes were projected to reach $5 billion this year but have surged to over $20 billion. For the Hong Kong market, Chung forecasts managed funds to reach up to $1 billion by the end of 2024.

Despite recent fluctuations in Bitcoin prices, CF Benchmarks remains optimistic about revenue growth, anticipating a mid-double-digit increase this year. This optimism is underpinned by the company’s robust 2022 revenue of £6 million ($7.5 million), as disclosed in its UK accounts.

Since Kraken‘s acquisition of CF Benchmarks in 2019 for a nine-figure sum, the London-based firm has significantly expanded its role beyond providing Bitcoin pricing for derivatives on the Chicago Mercantile Exchange. Plans are underway to bolster its workforce by about a third, exceeding 40 employees, in response to the escalating demand within the crypto ETF space.