Blockchain outfit ConsenSys and TrueDigital Holdings (TDH), a subsidiary of swap execution facility trueEX, have announced a joint venture to develop a benchmark price for Ethereum in a bid to win business from institutional investors looking to enter the cryptocurrency market.
Ethereum had a stellar performance last year, and also has for the most part maintained a hold on the number two position behind Bitcoin in terms of price and market capitalization.
The new collaboration creates the possibility of large-scale adoption among large financial institutions supporting both the vastly increased interest in the virtual coins and their inclusion as an asset class within relevant investment products.
At the same time, trueEX announced plans to launch a regulated derivatives marketplace for the crypto assets. Pending regulatory approval by the CFTC, the swap execution facility will initially list contracts for Bitcoin non-deliverable forwards (NDFs) settled in the US dollar.
trueEX’s affiliated brand, trueDigital Holdings, will provide product development, and act as the sales and marketing arm for the new products.
ConsenSys and trueEX said in a statement that institutional cryptocurrency trading has been held back by the absence of a necessary foundation, infrastructure and platforms. As such, their partnership allows institutional investors to take advantage of the new capability to trade cryptocurrencies either for their own accounts or to offer linked products to their customers.
trueEX noted that over the last few years, the total market cap of cryptocurrencies has grown from less than $1 billion to $420 billion. However, the marketplace is lacking “the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets,” said Sunil Hirani, trueEX co-founder and CEO.
He added: “Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities.”