The NYSE likely has found a bitcoin custody solution for institutional clients!

in bitcoin •  5 months ago

Yesterday it was announced that ICE, the parent company of the NYSE, would soon be making it possible for their customers to purchase bitcoin.

While it wasn't entirely clear what that meant as ICE didn't officially make that announcement, instead it was leaked by numerous sources that claim to have the inside track on such a development.

The implications of such an announcement are slowly coming to light.

According to the news we have out today it is looking like they will be launching crypto swap contracts, at least at first.

More about that can be read here:

https://cointelegraph.com/news/nyt-new-york-stock-exchange-owner-wants-to-let-customers-buy-bitcoin

And then also here:

https://cointelegraph.com/news/nyses-plans-for-physical-delivery-of-bitcoin-pave-way-for-major-crypto-adoption-analysts-say

This is a very big deal.

Why might that be a very big deal you may be wondering?

You see, these swap contracts are going to be BITCOIN SETTLED!

Say that with me, these swap contracts are going to be BITCOIN SETTLED!

Not cash settled like the futures and options contract that currently exist for bitcoin.

Why is that important?

What that means is that the exchange and its traders will have the ability to take physical settlement of the coins assigned for said contract.

That means the physical bitcoin market will actually be involved and impacted by this new product, the first time we have seen something like this on a large scale to date.

What's more, for ICE and the NYSE to be doing something like this must mean that they have found a solution to the custodian issues.

And that is the big crutch in all of this...

According to many in the Wall Street space the fact that there really isn't a way to store physical bitcoins that is satisfactory to many of the regulators has been a major hindrence to institutional money getting involved.

This likely development by ICE and the NYSE to offer swap contracts likely means that they have found a custodian solution that is likely SEC-qualified and fits with the SEC's compliance requirements.

What does this all mean for bitcoin and cryptocurrency prices going forward?

According to many in the space, this is exactly the kind of development and news that could open the doors to all kinds of institutional money.

The result could be massive moves in the cryptocurrency markets as a tidal wave on institutional money now has a legitimate option for entering the space.

Think about it, pensions and endowments, the really big money, would now have a gateway to enter the space for the very first time.

The fact that bitcoin is not really correlated with any other asset class makes it very attractive to allocate at least some portion of a portfolio to the asset from a manager's perspective.

(Source: https://www.coindesk.com/bitcoin-gold-know-blockchains-next-split/)

Bitcoin about to dethrone gold?

Most likely, the new investment money will come at the expense of something else, and in my opinion that something else is likely gold.

The reason for that is that bitcoin does many of the things that gold does, only better.

Sorry gold, you had your time in the sun.

Over the next 2 years I would not be surprised to see major weakness in gold and major strength in bitcoin and other major cryptocurrencies.

This news is likely the beginning of that trend.

Stay informed my friends.

Image Source:

https://news.bitcoin.com/solidx-first-bitcoin-etf-nyse/

Follow me: @jrcornel

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Always great to see more “mainstream” acceptance. When is the next big rally going to begin? 🧐😎🧐

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The Consensus Conference starts Monday, perhaps that will provide some fuel.

I just wish the NYSE would either confirm or deny this info

Why is this not making prices go up?

The crypto economy is still very small if this potentially falls true there will be a huge new market opening up to crypto.

Wall street is coming!

belfort-bitcoin.jpg

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the custodian will be taking on an enormous amount of risk frankly. Have to make sure they don't get hacked, compromised or that employees of this custodian aren't able to steal it either. No recourse for them if they screw up. Hopefully, they're going to charge an appropriate premium to act as a custodian as it bears significant risk.

This will be huge for cryptos. People with money trust NYSE and they will have people upselling cryptos now like they do with stocks

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Great point. "You can't miss this once in a lifetime opportunity. C'mon, just allocate like 5-10% of your portfolio. You can't afford to not be in this space."

Very excited to see mainstream institutions adopting this asset. Awesome how what a major bull market can do

I think this is a good news for the cryptoworld. Cheers guys for brighter future! Bitcoin to the moon! haha :)

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If this turns out to be true, it is massive news. The fact that the crypto markets haven't really responded yet is a bit puzzling though.

Why is there not a huge insider influx with this news?

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I have been wondering that myself. It seems the significance of this news is being missed thus far.

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I suspect the big players have been buying over the counter and not moving the price right now. A Bitcoin settled future is great news and will exert upward pressure on the price

Nice, I missed this update yesterday but great development for bitcoin.

These are the kind of moves that will drive the price of cryptos to the 🌙 moon.

To start with it will only be hedge funds taking advantage of this.

Pension funds are regulated as to the type of asset they can invest in, so I doubt they'll invest in bitcoin.

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While that is likely true, it doesn't mean they won't allocate something like 1% to an asset like bitcoin. A similar allocation to what they might do in gold/silver etc. It just serves as portfolio protection. However, 1% of that kind of money would turn out to move the crypto markets significantly.

I doubt the actual news will be anything like what has been leaked.
I wouldn't be surprised if this is reverse-FUD. Propaganda designed to move the price higher.

Everything the NYSE or ICE figures out to be secure... will be less secure than bitcoin. But, maybe they will figure out multi-sig wallets.

Gold will never be what it was. In the future, it will be a pretty yellow rock. But, before than its price will spike as all prices are inflated by hyper-inflation.

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They are probably taking all the currently available security options, IE storing in cold storage, possibly in a bunker etc. The big take away is that they probably got someone to insure it now though. As long as the products are insured, it's go time.

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Imagine a black box / briefcase cold wallet.

Where you have to unlock the case. Open it. Connect it.
Then enter a pass code and turn two keys.

... and then, 100 years from now, the open up thing (because its ancient junk) and they find a ledger nano taped to the bottom of a sheet of aluminum

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Lol possibly with a finger print scanner equipped with pulse reading technology? That way if they just cut off your finger they can't get in as there is no pulse.

Provably

Oh.... We are going to part of the history. When, gold is replaced by the crypto. And we are generation, who bring the new era in the world.

Thanks for sharing this..

This is a great news. If this really happen Bitcoin price as well as other cryptocurrency price will go up. World really need virtual currency, now a days, everything we can buy from online and we need a cashless world for future.

According to many in the Wall Street space the fact that there really isn't a way to store physical bitcoins that is satisfactory to many of the regulators has been a major hindrence to institutional money getting involved.

This would be great in the short term but this institutional money is going to make the market less volatile in the longterm and we will not have huge gains in a short period of time like we used to get previously and this will hurt some traders.

This is interesting
I started thinking that bitcoin is created to fight Gold in the first place. And who is buying Gold all the time Russia and China.
Well in this case Bitcoin is totally NWO currency against the people liberty and opposite to claims.

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NWO = new world order?

For now, this remains all speculation, but nonetheless, a possibility in the near future. In the meantime, head over to Blockbasis, a platform that allows users to send and receive crypto using only an email. Simple for beginners, with all the features a crypto expert would expect. See you there!

thanks for the information.

If it is true, then we are going to see huge investment add in the Market cap!
That'll automatically boost the value of bitcoin and we know bitcoin is the father of all coins, other's coin will also follow the bitcoin and they will also rise.
Congratulation!

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Yes it will. It is a bit surprising that crypto prices haven't responded more favorably just yet.

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The wait is a good thing to do! ;)

Last chance to buy under $10k, as Charlie Shrem tweeted.

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That sounds good to me!

dethroning gold? now, now, children. let's not talk crazy.

If what has been said is true and only $25 billion of new capital led to the the 2017 increase in valuations, then this news if executed would move the markets in multiples of that as the amount of capital from institutions on the sidelines are huge. We also still have the Fed welcoming risk taking as interest rates remain low so it will also support an allocationbof capital to riskier assets.

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Yes, but even if institutional clients just allocated something like 1-3% of their portfolio, it would move markets in a big way. Not as a risky investment, just as a hedge in a non correlated asset.

An excellent news on the one hand! It is said that this month will be the last time you can see the btc below the $ 10,000! Could the BTC support or raise the strength of the dollar even more if the stock exchange has a share in this?

mar.jpg

follow me update

It will great impact on cryptocurrency lover. I am just trying to invest on it.

This is awesome news! Do you have a price prediction on the market capitalization when wall street permits trading Bitcoin? @jcornel

My prediction is at least a trillion.

Thanks for the updates! 👍👍

Adoption is coming from Wall Street. There's money to be make and if they don't participate, they will only lose out. Coinbase has made 1 billion last year. It speaks a lot about the exponential demand of crypto as an asset class.

Source:
http://www.businessinsider.com/coinbase-reportedly-made-more-than-1-billion-in-revenues-last-year-2018-1

Hi! @jrcornel This information provided is really helpful. Thanks for all your post that is well informed. Just resteemed.

Bitcoin has the right balance of pros and cons. That's why it's so popular.

very fresh to crypto world from and crypto banned country Nepal. hope crypto will get a global recognition. developing countries could have a huge potential for overall economic grown if we get a proper knowledge about it.

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Please read my post and I want to communicate with you.

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"This announcement by the ICE and the NYSE to offer swap contracts likely means that they have found a custodian solution that is likely SEC-qualified and fits with the SEC's compliance requirements."

Sorry but there hasn't been any announcement by either NYSE or ICE on this.

This article by NYSE seems to have been hyped up. I am sure not only NYSE but every exchange in the world is thinking of this looking at the profits of binance and coinbase. So thinking is not big news.

Moreover, the facts stated in the article by cointelegraph and NYSE are very questionable. Swaps involved swapping one thing for the other. Why swaps? The instruments sound like bitcoin, settlement on exchanges is typically t+2 or t+3 days. But given how fast bitcoin metwork is, settlement should be on the same day. Otherwise may be they are 1 day physically settled futures.

Also exchanges do not provide custoday. The world of traditional finance should not accept that.

I think the NYT article saw some email exchange on potential of bitcoin trading and most of it is a figment of his own imagination.

I agree with one thing. This, if happens will be huge and may mean that regulation for bitcoin is round the corner.

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Good points, though if it wasn't true don't you think it would have been refuted at this point?

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i am not denying ICE is thinking about starting a bitcoin exchange. If they weren't, it would be more shocking. also they may be thinking of some kind of swaps. may be for institutional players, other derivatives make sense given futures have been successful to a large degree. they may also be thinking of solving custody issues for some clients. all i am saying is just as there is negative fud, there can be hype.

given the success of crypto, no one wants to be left behind. adding blockchain to a company's name these days leads to massive increases in stock price. this hype not only helps cryptos but also ICE, it helps them answer questions about bitcoin from their shareholders.

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Yes that is a good point. The fact that it hasn't really been refuted at this point, despite the fact that major news networks are reporting it and reaching out to ICE and NYSE for comment leads me to believe there likely is more than just "thinking about doing it". We will find out more in the coming weeks though.

News Exclusive estimated @jrcornel, all markets globally, are developing in all their financial mechanisms the blockchain technology, Bitcoin is here to stay, we started a new financial era without realizing it, the call is to educate us, so that it does not happen to us like the shrimp.
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Finaly, MORE VOLATILITY on the market again!

I think its a good news for us.

Best of luck sir..... Nice post thank you so much sir, for this shearing

Excellent News, thanks you for Share

Thanks for sharing your knowledge with us

This is an important news everyone have to read

I think in the hands of the Chinese that there is bitcoin in the world at all !

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I am not sure what you are trying to say here.

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I would like to say that more than using the crypto currency

For now, this remains all speculation, but nonetheless, a possibility in the near future. In the meantime, head over to Blockbasis, a platform that allows users to send and receive crypto using only an email. Simple for beginners, with all the features a crypto expert would expect. See you there!