Bitcoin’s mad rush from 10,000 USD to 11,000 USD could be largely attributed to Nasdaq’s Inc. announcing the launch of Bitcoin Futures by Q1 2018. This wouldn’t be Nasdaq’s first tryst with the cryptocurrency – it lists an exchange-traded note linked to bitcoin in one of their European exchanges.
The Wall Street Journal reports that Nasdaq’s bitcoin contract would debut on Nasdaq Futures, or NFX, a marketplace that the New York-based exchange group launched in 2015 that until now has mainly focused on energy trading, according to the people familiar with the situation.
Around the same time wall street broker Cantor Fitzgerald LP also announced that it is seeking to launch bitcoin derivatives on an exchange it owns, also in the first half of next year. In an interview with WSJ, the firm stated that they aim to launch a bitcoin swap—a type of derivative—on Cantor Futures Exchange LP. Cantor’s swap would allow traders to bet on bitcoin prices up to three months out, with built-in protections to limit their losses if bitcoin prices swung above $15,000 or below $5,000.
The firm expects retail traders to be the initial adopters of the new contract, but it is targeting institutional players too, executives said.
“The asset class is not going away,” said Shawn Matthews, chief executive of Cantor Fitzgerald & Co., the firm’s brokerage arm. “If you look at the next level, it will be the institutions coming in and being larger participants in the marketplace, especially as liquidity gets better.”
Our Take
A lot of the Wall Street’s intentions to start trading bitcoin comes from the meteoric rise Bitcoin has had over the year. The current has grown tenfold since its original value at the beginning of the year and looks to be on the mother of all bull runs.
It is also encouraging to see established financial institutions adopt bitcoin in some way, as these were the same companies that were reluctant to do anything with bitcoin citing its highly volatile nature, money laundering and other criminal activity.
Bitcoin futures would be a big step toward maturity for cryptocurrency in general, especially when you consider that the market as a whole is just 8 years old. This would make it easier for both big banks and retail investors to trade bitcoin.
Onward and beyond!
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