Nasdaq plans to offer bitcoin futures in early 2018
Now, Nasdaq is planning to launch contracts for bitcoin futures in the first half of 2018, according to The Wall Street Journal, which will enable investors to predict and put money on the future price of the currency.
The Wall Street Journal also reports that broker Cantor Fitzgerald will be launching bitcoin derivatives on its own exchange in the first half of next year as well, making for yet another brokerage to help make bitcoin a more mainstream financial instrument. The relative youth and volatility of the currency still keeps many investors away, of course, but bitcoin is probably here to stay, even if this is just a bubble. New uses for regular folks to spend with the currency continue to rise, like the UK Visa card based on bitcoin and Square's testing of the currency in its payment app.
- CME, Cboe have already announced plans for bitcoin contracts
- Nasdaq wants to launch them as early as 2Q, source says
https://www.bloomberg.com/news/videos/2017-11-29/bitcoin-tops-10-000-mark-for-first-time-video
The plan is yet another sign of a large exchange operator pushing bitcoin further into the mainstream investing universe. The offering will pit Nasdaq against two bigger competitors, CME Group Inc. and Cboe Global Markets Inc., both of which already announced plans to offer cryptocurrency derivatives. Nasdaq is a comparatively small player in the futures market, which may make it harder to cultivate an image as a destination for cryptocurrency derivatives trading.
“They’re a small futures exchange, so they possibly see the potential to get into a product that could be much larger some day,” said Rich Repetto, an analyst at Sandler O’Neill & Partners LP.
Allan Schoenberg, a Nasdaq spokesman, declined to comment.
Up Against Bigger Players
The strategy also means that New York Stock Exchange owner Intercontinental Exchange Inc. is the only one of the four major U.S. exchange operators without public plans to offer bitcoin derivatives.
One way Nasdaq seeks to differentiate itself seems to be in the amount of data it uses for pricing the digital currency contracts. VanEck Associates Corp., which recently withdrew plans for a bitcoin exchange-traded fund, will supply the data used to price the contracts, pulling figures from more than 50 sources, according to the person. That appears to exceed CME’s plan to use four sources, and Cboe’s one. Nasdaq’s contracts will be cleared by Options Clearing Corp., the person said.
Handling Hard Forks
The Nasdaq contracts are also designed to handle bitcoin hard forks more elegantly, the person said. Hard forks occur when miners agree to changes in the network that underpins the cryptocurrency, creating a new version. Nasdaq’s product will reinvest proceeds from the spin-off back into the original bitcoin in a way meant to make the process more seamless for traders, the person said.
Read More: Bitcoin Futures Draw Push Back, Not Stop Light From Market Cops
Bitcoin currently trades on virtually unregulated markets. Nasdaq, CME and Cboe are heavily regulated, bringing an air of legitimacy that should help professional investors feel more comfortable participating. Anyone on the sidelines has missed out on a massive rally: Bitcoin’s price has increased in value by more than 11 times in 2017.
“It’s a great example of the increasing institutional interest in this new asset class,” said Adam White, general manager of GDAX, a cryptocurrency exchange owned by Coinbase. “The emergence of derivatives will help with the process of price discovery.”
The Wall Street Journal earlier reported on Nasdaq’s plan.
source
https://www.engadget.com/2017/11/29/nasdaq-bitcoin-futures-early-2018/
https://www.bloomberg.com/news/articles/2017-11-29/nasdaq-is-said-to-plan-bitcoin-futures-joining-biggest-rivals