Kraken’s subsidiary is a quiet giant in Bitcoin ETF growth: Bloomberg

Kraken’s
subsidiary,
CF
Benchmarks,
is
a
quiet
major
player
in
the
growing
popularity
of
Bitcoin
exchange-traded
funds
(ETFs),
Bloomberg

reported
on
Friday.
The
company
provides
benchmark
indexes
for
roughly
$24
billion
worth
of
crypto
ETFs,
including
BlackRock’s
US-based
Bitcoin
ETF
and
all
six
of
the

newly
launched
Bitcoin
and
Ethereum
ETFs
in
Hong
Kong.

CF
Benchmarks
operates
by
licensing
its
data
to
ETF
providers,
with
fees
that
scale
with
the
ETF’s
investor
base.
The
company
claims
it
holds
about
half
of
the
crypto
benchmarking
market.
This
dominance
has
placed
CF
Benchmarks
at
the
heart
of
Bitcoin
ETF
growth,
especially
with
the
successful
introduction
of
spot
Bitcoin
ETFs
in
the
US,
which
has
led
to
increased
revenue
streams
for
the
firm.

CF
Benchmarks
CEO,
Sui
Chung,
reported
that
assets
for
US
spot
Bitcoin
ETFs
utilizing
CF
Benchmarks’
indexes
have
exceeded
expectations,
reaching
more
than
four
times
the
anticipated
$5
billion
this
year.
He
also
predicted
that
Hong
Kong
products
would
manage
up
to
$1
billion
by
the
end
of
2024.

Chung anticipates
CF
Benchmarks’
revenue
to
increase
significantly
this
year
and
plans
to
expand
their
workforce
by
a
third. The
company
is
also
setting
its
sights
on
new
markets,
including
South
Korea
and
Israel,
where
there
is
a
strong
affinity
for
digital
assets
and
ETFs.

“South
Korea
is
a
market
where
ETFs
have
become
the
wrapper
of
choice
for
long-term
savings,”
Chung
said.
“It
is
also
a
market
where
digital
assets
have
gained
a
high
degree
of
adoption.”

From
the
US
decline
to
Hong
Kong’s
modest
start

While

the
launch
of
US
spot
Bitcoin
ETFs
initially
drove
Bitcoin’s
price
to
a
record
high
in
March
2024,
the
price
has
faltered
as
investor
demand
for
the
funds
has
cooled.
Bitcoin
ETFs
in
the
US
witnessed
their
largest
daily
outflow
on
Wednesday,
with
assets
under
management
closing
at
approximately
$47
billion.

Meanwhile,

the
debut
of
spot
crypto
ETFs
in
Hong
Kong
wasn’t
particularly
strong.
On
the
second
day
of
trading
(March
2),
Hong
Kong’s
three
bitcoin
exchange-traded
funds
only
saw
inflows
of
$10.3
million,
based
on

data
from
SoSoValue.
This
figure
was
considerably
lower
compared
to
the
first
day’s
inflow
of
$240
million.
Trading
volume
reached
$9.7
million
on
both
days.

However,
these
Hong
Kong-listed
spot
Bitcoin
funds
currently
hold
around
$238
million
BTC
in
assets
under
management.