Solactive launches bitcoin futures index

Dec 22nd, 2017 | By | Category: Alternatives / Multi-Asset

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Frankfurt-based index provider Solactive has unveiled the Solactive Bitcoin Front Month Rolling Futures 5D Index, tracking the performance of bitcoin futures listed on Cboe Global Markets.

Steffen Scheuble, CEO of Solactive

Steffen Scheuble, CEO of Solactive

The launch comes just three weeks after the approval of bitcoin futures by the Commodity Futures Trading Commission in the US. The approval of bitcoin futures has been considered a major step forward in the eventual approval of bitcoin-tracking ETFs, which have thus far failed to pass regulatory scrutiny.

On 10 December 2017, Cboe became the first regulated exchange to list bitcoin futures, for which Solactive has been granted worldwide exclusivity in index calculations. Since that time, there has been a host of new and renewed applications to the Securities and Exchange Commission (SEC) by ETF providers to launch bitcoin-related products.

The index tracks the performance of front-month XBT futures, with exposure rolled over a five day period from the active contract to the nearest back-month contract as expiry approaches. Solactive has noted that its index is available for licensing and can be used as the basis for structured products and ETFs.

Steffen Scheuble, CEO of Solactive AG, commented: “The world is becoming more and more digitalized. Technology is affecting all areas of finance, including payment systems, wealth management with robo-advisors, and now currency with the rise of cryptocurrencies. We are very pleased to be offering exposure to bitcoin futures through the Solactive Bitcoin Front Month Rolling Futures 5D Index. This is unprecedented in the history of capital markets and clearly opens the door to new bitcoin-based investment products.”

Bitcoin, the most prominent cryptocurrency, rose from $789 in December 2016 to $18,960 in December 2017, representing an increase of more than 2,300% over the course of the last twelve months. According to coinmarketcap.com, an online platform tracking the performance of cryptocurrencies, the total market capitalization of bitcoin reached $320 billion in the third week of December 2017.

By tracking bitcoin futures, rather than spot prices, the index may be able to reduce exposure to some of the volatility associated with the digital currency.

The index is calculated as an excess return index and is published in USD.

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