The world’s second largest stock exchange Nasdaq is planning to introduce a Bitcoin futures market within the first quarter of 2019.
Sources told Bloomberg that Nasdaq has been cooperating with the Commodities and Futures Trading Commission (CFTC) to receive regulatory approval to operate as a compliant cryptocurrency futures market operator.
The report read:
“Nasdaq has been working to satisfy the concerns of the U.S.’s main swaps regulator, the Commodity Futures Trading Commission, before launching the contracts, the people said. The New York exchange operator, which was first reported to be eyeing Bitcoin futures last year, wants to allow trading in the first quarter of 2019, one of the people said.”
Bakkt, a cryptocurrency exchange built by ICE, the parent company of the New York Stock Exchange, is expected to launch its Bitcoin futures market on January 24.
On November 20, the company delayed the listing of Bitcoin futures citing an unforeseen increase in demand for its futures product. Bakkt stated that it needs additional time to prepare the infrastructure that is required to serve a large group of investors based in the US.
“ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on trade date Thursday, January 24, 2019, subject to regulatory approval. The new listing timeframe will provide additional time for customer and clearing member onboarding prior to the start of trading and warehousing of the new contract,” Bakkt announced.
Currently, the demand from institutional investors for crypto can only be evaluated through the numbers that Bakkt, Fidelity Digital Assets, Goldman Sachs, BitGo Custody, Coinbase Custody, and other major over-the-counter (OTC) markets can provide.
The entrance of Nasdaq in a long-lasting bear market and downtrend suggests that the company sees sufficient institutional demand from the U.S. market. A conglomerate in the size of Nasdaq does not allocate a large portion of its resources to develop an infrastructure for a new asset class unless it is certain that the demand for it will grow over time.
Depending on the delivery of Nasdaq’s plans, by the second quarter of 2019, the cryptocurrency market could have Nasdaq and NYSE, two of the largest stock exchanges, in the global market operating Bitcoin futures markets.
Bakkt physically delivers Bitcoin to its investors and as such, it could have an actual impact on the supply of Bitcoin and ultimately its price. The intricacies of Nasdaq’s plans remain unclear but the two markets could lead to an increase in additional liquidity for the asset.
Since August, when the U.S. Securities and Exchange Commission (SEC) denied exchange-traded funds (ETFs) based on the futures market, the commission consistently stated that the futures market is simply not of significant size to handle large-scale investment vehicles.
In the next 6 to 12 months, the stance of the SEC towards the Bitcoin futures market could change if Bakkt and Nasdaq demonstrate real demand from local investors.
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Last modified: March 4, 2021 3:12 PM