MVIS and CryptoCompare Launch a New Bitcoin Benchmark Rate

Siamak Masnavi

On Wednesday (June 3), MV Index Solutions GmbH ("MVIS"), the indexing division of U.S. asset manager VanEck, and CryptoCompare, a leading digital asset market data provider, launched the MVIS CryptoCompare Bitcoin Benchmark Rate (ticker: BBR).

Frankfurt-based MVIS "develops, monitors and licenses the MVIS Indices, a selection of focused, investable and diversified benchmark indices." Approximately $14.48 billion in assets are "currently invested in financial products based on MVIS Indices."

CryptoCompare, which was founded in 2014 and is headquartered in London, provides retail and institutional investors with reliable real-time and historical cryptocurrency market data. One way it tries to insure the integrity of its data is by reviewing crypto exchanges on a monthly basis, monitoring for market abuse, and taking regional anomalies and geographical movements into consideration. 

On 6 November 2017, MVIS announced that it had "became the first major index provider to offer digital asset (crypto) indices" via a partnership with CryptoCompare, and said that "MVIS CryptoCompare Indices are the first to meet investment industry benchmarking standards by providing a public rulebook for fork treatments and other events, industry-wide data distribution, proper identifiers and further standard index governance requirements that are expected from a regulated, unaffiliated, major benchmark provider."

In a press release shared with CryptoGlobe, the two companies said that their newly-launched Bitcoin Benchmark Rate is an index "designed to offer a robust hourly price for Bitcoin in USD." 

BBR is a rules-based index that covers the five highest ranked exchanges in CryptoCompare’s Exchange Benchmark. At the time of writing, these top five exchanges are three AA-rated exchanges itBit, Gemini, Coinbase, Kraken, and Bitstamp, as you can see from the screenshot below:

Exchange Benchmark - Top 10 - 3 June 2020.png

This index "aggregates transaction prices" on these five exchanges by taking an average of quantity-weighted median prices, and it is updated on an hourly basis. 

The MVIS CryptoCompare Bitcoin Benchmark is meant to serve "as a reference rate for funds, asset managers and exchanges who wish to build financial products on bitcoin, such as derivatives and ETPs." 

Here are some key features of the MVIS CryptoCompare Bitcoin Benchmark Rate:

  • Number of Components: 1
  • Base Date: 31 December 2015
  • Base Value: 425.53

One of the first companies that plans to take advantage of this new index to launch new innovative products in the digit assets space is Swiss bank SEBA Bank AG, which calls itself "The Bank for the New Economy". Interestingly, SEBA was "closely involved in the development of the reference rate."

Currently, SEBA offers a wide variety of crypto services, including trading, custody, lending, research, and asset management ("with active and passive strategies").

Daniel Kuehne, Head of Asset Management at SEBA, had this to say:

“It is essential for derivatives on cryptocurrencies to have a representative reference rate which is robust against market distortions and manipulations. We are pleased to have contributed to the MVIS CryptoCompare Bitcoin Benchmark Rate and to play a key role in helping the emerging derivatives market gain greater acceptance among professional and institutional investors".

As for Thomas Kettner, Managing Director of MVIS, he added:

“We are pleased to launch this index, which is designed to provide a price for bitcoin which is hard to manipulate. The index follows our long-term mission in supporting new product developments with the aim of providing investors access to bitcoin data”.

Finally, Charles Hayter, CEO and Co-Founder of CryptoCompare, stated:

“We are excited to be leading the charge to bring greater transparency to the digital asset class by providing high-quality data and trusted indices. Working in partnership with MVIS, we are pleased to offer investors a premium tool to better measure the performance of their Bitcoin exposure.”

Featured Image by "petre_barlea" via Pixabay.com