The chief executive of the owner of the New York Stock Exchange (NYSE), Intercontinental Exchange Inc (ICE), has discussed the company’s decision not to launch bitcoin futures markets. Jeff Sprecher of ICE described the opacity of the bitcoin markets as a driving factor behind the company’s decision.
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ICE Has Decided That the NYSE Will Not Launch Bitcoin Futures Markets at This Time
Speaking at a financial services conference hosted by Goldman Sachs earlier this week, ICE’s chief executive, Jeff Sprecher, stated “I don’t know what to make of cryptocurrencies,” adding “We didn’t think it was obvious to rush out a product and be first and settle against an index on a lot of exchanges that are not particularly transparent.”
Mr. Sprecher conceded that “We may be stupid for not being first” to launch bitcoin futures, but reaffirmed the company’s wary position regarding cryptocurrencies. “To short that would mean that they have decided to exit and through a legitimate, high-standing, regulated venue, they are exiting, and I look at that and just say, is that going to work out well for me as a venue?”
CME and CBOE Bitcoin Futures Markets Prepare for Launch
A number of major financial and commodity derivative exchanges have recently announced plans to launch bitcoin futures markets. ICE competitors CBoe Global Markets and CME Group Inc are set to launch bitcoin futures contracts in coming weeks, with Cboe expected to launch on December 10th and CME on December 18th. Nasdaq Inc has also stated that it intends to launch bitcoin futures in 2018. CME will set its price according to the CME CF Bitcoin Reference Rate, which derives from the price from Kraken, Itbit, Gdax, and Bitstamp. Cboe has announced that its price will be derived from auction on Gemini.
The regulatory reaction to bitcoin futures markets has been mixed. On December 5th, South Korea’s Financial Services Commission announced a ban on bitcoin futures. The Commodity Futures Trading Commission recently described bitcoin futures as “a unique animal unlike any commodity we’ve looked at before” in an interview that emphasized the institution’s concerns regarding the potential for futures contracts to be used a means vehicle for price manipulation in the bitcoin markets.
Do you think it is a mistake for the NYSE not to launch bitcoin futures contracts? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Intercontinental Exchange Inc.
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