Cboe Global Markets is joining the race to take cryptocurrency pricing mainstream.
The exchange owner will launch a suite of tools in 2021 in a licensing partnership with execution provider CoinRoutes. Cryptocurrency indexes, historical data and real-time ticks are all on the table, said Catherine Clay, Cboe’s information solutions chief.
The deal makes Cboe, which operates the largest options exchange in the U.S., the latest financial force to enter the cryptocurrency data business. It’s been a busy December, with service providers looking to keep up with institutions going long on bitcoin. For example, S&P unveiled its crypto index plans Dec. 3 and one week later announced a stake in Lukka, the firm facilitating the product.
Clay said Cboe will initially focus on providing data for “just a handful” of cryptocurrencies with high market caps – likely 10 or fewer top trading pairs to start. For example, bitcoin and ether traded against the dollar.
Rollout will come in three phases, she said. Cboe’s data shop will backfill historical price data in Q1 2021. It will then begin distributing real-time price data to clients. Once these two “foundational pieces” form, Clay said Cboe’s “index team can get busy.”
“I would guess that in Q2, you’ll start to see actual indices come from this data through our Cboe global index team,” Clay said.
Cboe taps CoinRoutes
Cboe picked CoinRoutes’ data after a yearlong evaluation of partners, Clay said. The thinking was that CoinRoutes’ order-routing business provides an edge in measuring the market. Plus, she was impressed by the firm’s methodologies accounting for discrepancies in fees across different exchanges.
CoinRoutes CTO Ian Weisberger told CoinDesk his firm’s order-book business gives it a “huge advantage” over data-only crypto firms, which might solely rely on where the market’s been, instead of where it’s going.
The deal continues a trend of crypto industry veterans courting wider audiences through alliances with mainstream names. While advanced crypto traders might already be familiar with CoinRoutes, Galaxy and Lukka for pricing data, newer crypto investors know brands like Cboe, S&P and Bloomberg far better.
“We’re attracted to [Cboe] because they’re a very large organization that has really good penetration in that space,” said CoinRoutes CEO David Weisberger.
Clay said Cboe is rolling out this product as yet another data offering for clients demanding intelligence across asset classes of all stripes. Cboe is trying to “stay ahead” of traditional clients’ shift to digital assets.
“We want to be of service to them as they embark on that endeavor,” she said.
The partnership marks Cboe’s first jump into the realm of cryptocurrency data. It comes more than a year after Cboe abandoned another crossroads of digital assets and traditional finance: bitcoin futures trading. Cboe put its bitcoin futures product on ice in March 2019.
However, Clay said Cboe’s corporate interest in cryptocurrencies never diminished.