Nasdaq moves towards bitcoin futures, unphased by crypto carnage
When you're searching for volatility, market gore might mean you're heading in the right direction.
"Will digital assets survive?" New York Stock Exchange chairman Jeffrey Sprecher quoted at the Consensus Invest conference last Thursday. "The unequivocal answer is yes... We're kind of agnostic to price."
He was followed up by Intercontinental Exchange (ICE)-backed Bakkt CEO Kelly Loeffler, who reiterated the trading giant's plan to release bitcoin futures contracts for more reliable price discovery.
"The Bakkt futures contract will help Bitcoin traders establish a trusted price. Bitcoin now trades at different prices on different exchanges, many of which are unregulated," she explained.
Nasdaq is now reported to be making decisive moves of its own, with a Bloomberg report citing two insiders who say it's betting on sustained interest into the next year, regardless of current price movements.
They explained that the Nasdaq is currently working to satisfy the Commodity Futures Trading Commission's (CFTC's) concerns around regulatory elements of the plan.
Last April Nasdaq CEO Adena Friedman described the exchange as being very open to the idea of trading cryptocurrencies, but said it was mostly waiting for the right time when various regulatory and logistical obstacles were less in the way.
In all cases these established institutions will be joining Cboe and CME which expedited bitcoin futures trading at the start of this year within a self-regulatory framework. It might be seen as a strange gamble in that respect though, with Bloomberg noting that interest in those bitcoin futures has only been modest to date.
Nasdaq is trying to differentiate itself from the existing offerings though, with Bloomberg quoting Friedman as previously saying it was looking at what it could do differently. Plus, while CME and Cboe may have been struggling to attract interest, it's still worth noting that bitcoin derivatives have been exploding in less traditional markets.
BitMEX has been doing about $3 billion in bitcoin derivative trade volume per day since the recent crash, and has smashed records several times throughout the year with daily trade volumes worth the equivalent of over $8 billion, so it's perhaps too soon to say that interest in bitcoin futures is only modest.
Other larger institutions have been moving towards cryptocurrency for even longer. Fidelity, for example, has been doing bitcoin since 2014 – which means 2018 is only the third-worst cryptocurrency crash it's seen so far – and plans to launch Fidelity Digital Assets in early 2019.
Volatility tends to bode well for general interest. So if big exchanges are wading through a bloodbath on their way to the market, that probably means they are heading in the right direction.
- The view from Switzerland’s Crypto Valley with Mattias Hjelmstedt
- Bootstrapping trust: What stablecoins say about the value of money
- 40-50 banks expected to use Stellar-powered IBM World Wire
- Cryptocurrency market rising: This chart shows why it may continue
- Analysts predict AUD to sink despite market buoyancy