Kraken’s Subsidiary CF Benchmarks Thriving Between Bitcoin ETF Frenzy

Amidst the surge in spot Bitcoin (BTC) exchange-traded funds (ETFs), a subsidiary of US-based crypto exchange Kraken, CF Benchmarks, is quietly reaping significant benefits, suggests a recent Bloomberg report.

CF Benchmarks, headquartered in London and owned by Kraken, specializes in providing reference data for approximately $24 billion in crypto ETFs, a niche market witnessing a rapid expansion post the introduction of BTC ETFs.

The Driving Force Behind the Success

By licensing its benchmarks to Bitcoin ETF issuers like BlackRock, CF Benchmarks earns fees, which escalate with the issuer’s assets under management. The recent approval of spot market BTC ETFs by the U.S. Securities and Exchange Commission (SEC) and their subsequent launch in Hong Kong have significantly bolstered CF Benchmarks’ revenue streams.

CF Benchmarks CEO, Sui Chung, foresees further opportunities, anticipating the expansion of BTC ETFs into markets like Israel and South Korea, especially given the growing acceptance of digital assets in these regions. Chung highlights South Korea’s inclination towards ETFs as a preferred investment vehicle for long-term savings, making it a promising market for BTC ETFs.

Chung predicts that the assets under management for Hong Kong BTC ETFs will witness a substantial increase, potentially reaching $1 billion by the year’s end.

Acquired by Kraken in 2019 for a significant nine-figure sum, CF Benchmarks projects robust revenue growth, expecting to achieve “mid-double digits” this year, signaling a promising trajectory for Kraken’s subsidiary amidst the evolving landscape of crypto ETFs.