Futures contracts have always been quite appealing to speculators and market makers. This is especially true in the world of Bitcoin, as many people would like to be exposed to the price without needing to buy BTC itself, which is still pretty cumbersome for most people. Nasdaq is getting in on the Bitcoin futures action, as its new contracts will launch in 2018.
Nasdaq is pro-Bitcoin
No one is really surprised to see Nasdaq going all-in on Bitcoin trading these days. The company has been open-minded when it comes to cryptocurrencies for several years now. Moreover, it has some of the more traditional investment vehicles linked to Bitcoin on its Nordic exchange as well. Adding Bitcoin futures contracts to the main exchange platform makes a lot of sense, especially given the current interest in the world’s leading cryptocurrency.
According to Reuters, Nasdaq will offer its Bitcoin futures contracts at some point in 2018. This news comes at an interesting time for Bitcoin, as the currency recently surpassed the US$10,000 mark for the first time in its history. A lot of price volatility ensued shortly afterward, but that is exactly what investors want to get exposed to. Betting on the price of Bitcoin is still a gamble, but it is a more approachable proposition than buying Bitcoin directly.
Moreover, Nasdaq is joining a growing list of “financial bastions” finally getting with the Bitcoin program. CBOE Holdings and CME Group have also announced their Bitcoin futures products, which are all set to launch in the next few weeks. This industry will see a lot of competing providers in short order, which can only be considered a good thing. At the same time, this may result in even more Bitcoin price volatility, although it remains to be seen how that will play out exactly.
This service was made possible in part by Nasdaq’s partnership with VanEck. This New York-based money manager will help develop the Bitcoin futures contracts, which in turn will be cleared by the Options Clearing Corporation. This is the same company handling all of Nasdaq’s futures contracts, mind you, and it is good to see them getting on board with Bitcoin. For now, it is unclear when this new product will come to market exactly.
The name VanEck was mentioned in relation to Bitcoin earlier this year. After filing for a Bitcoin ETF with the SEC, the company was forced to withdraw its application. It is evident the SEC has no intention of approving such a Bitcoin ETF anytime soon unless something changes in the regulatory department. However, once the Bitcoin futures contracts become available, things may change in this regard.
One thing that will set Nasdaq’s product apart from the competition is that it will use a lot more Bitcoin price sources. More specifically, these contracts will take the average price based on 50 different exchanges all over the world. How this will work out compared to the products from CME and CBOE Holdings remains to be determined. It is important to give investors the correct information associated with this trading vehicle.