Crypto enthusiasts are now working hard to come up with crypto-based trading products that will attract institutional investors. In an announcement, ConsenSys, a blockchain application startup in New York, said that it is partnering with TrueDigital, which is an affiliate of online interest swap marketplace TruEx; with the aim of coming up with a benchmark price for Ethereum’s Ether cryptocurrency.
In the announcement, the two companies say they plan to design a target reference index for the price of Ether (ETH) as the first step towards the objective of developing more crypto trading products that will attract institutional investors.
Is This the Next Frontier in the Crypto Industry?
The partnership comes just a few days after TruEx announced that it was planning to launch a derivatives marketplace for cryptocurrency assets. TruEx is expected to launch its first contract on its swap trading platform, which is Bitcoin based. Coindesk reports that the Bitcoin contract will be marketed under the TrueDigital brand. Currently, the contract is being scrutinized by the US Commodity Futures Trading Commission (CFTC) for approval.
If the contract is approved, TruEx will join the CME Group and the Chicago Board Options Exchange (CBOE) in offering trading of Bitcoin futures, which have been approved by the CFTC.
The announcement follows the growing interest in cryptocurrency-based derivative products by the institutional investors. Sunil Hirani, founder of TrueDigital, says that development of crypto-based derivatives could be the next frontier in the industry. Hirani said,
Of late, we have seen an enhanced increased interest from institutional investors and developers will reap big if they go to this direction,
While the plan is in its nascent stages, if it is approved, it may lead to a rush in the development of exchange products for Ethereum with an official price index.
Sunil Hirani said,
Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities,
He continued to explain that the marketplace lacks the requisite foundation, infrastructure and platform which institutional investors have come to expect, as is the case in other important markets.
What’s your opinion on the recent move by Ether to target institutional investors? Is this the new norm in the crypto market? Share your views in the comments section.