An undisclosed division of Kraken, a popular cryptocurrency exchange based in the United States, is reportedly reaping significant benefits from the surge in popularity of spot Bitcoin (BTC) exchange-traded funds (ETFs). CF Benchmarks, a London-based subsidiary of Kraken, is quietly emerging as a beneficiary of the introduction of BTC ETFs, according to a recent report by Bloomberg. CF Benchmarks provides reference data for approximately $24 billion worth of crypto ETFs and licenses its benchmarks to Bitcoin ETF issuers, such as BlackRock, in exchange for fees that increase based on the issuer’s assets under management. In January, the U.S. Securities and Exchange Commission (SEC) approved spot market BTC ETFs, and these ETFs also recently launched in Hong Kong. Sui Chung, the CEO of CF Benchmarks, anticipates that BTC ETFs will be approved by regulators in Hong Kong and subsequently introduced in Israel and South Korea, where ETFs have become the preferred investment vehicle for long-term savings and digital assets have gained widespread adoption. CF Benchmarks initially expected to attract $5 billion in assets from spot market BTC ETFs that utilize its indices, but the figure ended up being four times larger than anticipated. Chung predicts that an additional $1 billion in assets will be managed for Hong Kong BTC ETFs by the end of the year. Since being acquired by Kraken in 2019 for a substantial sum, CF Benchmarks foresees its revenue growing at a substantial rate this year. At the time of writing, Bitcoin is trading at $63,433, experiencing a slight increase in value.
