Nasdaq (New York City-based National Association Securities Dealers Automated Quotations), the world’s second largest stock exchange, is reportedly moving forward with its plans to list bitcoin (BTC) futures.
This, according to two sources who are familiar with Nasdaq’s internal operations. As CryptoGlobe reported in September, Nasdaq appeared to be laying the groundwork for crypto-related projects - as it had made a $190 million “all cash recommended public offer” on September 14th to acquire Cinnober (a crypto-friendly global provider of financial technology to large exchange operators).
It appears that Nasdaq, which has a market capitalization of $10 trillion, believes digital currency prices might recover - even though over $700 billion has been wiped off of the cryptoasset market since December of 2017 and early 2018 (when crypto prices reached all-time highs).
CME, Cboe Were The First To Introduce BTC Futures
At present, Nasdaq is working closely with the US Commodity Futures Trading Commission (CFTC), the regulatory authority on swaps (or futures contracts), in order to make sure its BTC futures comply with regulatory guidelines.
As CryptoGlobe covered, the Intercontinental Exchange (ICE), which owns the world’s largest stock exchange, NYSE, is planning to offer BTC futures contracts in early 2019 through its crypto-focused subsidiary, Bakkt.
In December of 2017, the CME Group and Cboe Global Markets introduced bitcoin (BTC) futures for the very first time. Both the CME and Cboe used a basic self-certification process to issue BTC futures contracts - at the time when the digital currency market was nearing the end of its historic bull run.
Not Meeting Expectations
Although many analysts were expecting that BTC futures would be the start of a large number of institutional investors entering the cryptoasset markets, they have so far failed to meet expectations. Bitcoin, the flagship cryptocurrency, had been trading at an all-time high of nearly $20,000 (in Dec 2017), however, its price has dropped considerably since then - as it’s currently trading below $4,000 mark - according to CryptoCompare data.
As CryptoGlobe reported in late October, both the CME and Cboe traded an average of only 9,000 contracts per day during the third quarter of 2018 - which is just a tiny fraction of what’s currently traded on the traditional futures markets. Commenting on the relatively low trading activity, Craig Pirrong, a finance professor at the University of Houston, had said:
It has not been what you would call a roaring success...Institutional players have stayed on the Bitcoin sidelines, and as long as they are, the futures contracts are likely not to generate substantial amounts of volume.
Updated at 17:50 UTC on 27 November 2018: Around one hour ago, while on stage at the Consensus:Invest 2018 conference in New York City, Gabor Gurbacs, Director for Digital Asset Strategy at VanEck/MVIS, announced that VanEck is partnering with Nasdaq to "bring a regulated crypto 2.0 futures-type contract" to the market. And at 17:10 UTC, Gurbacs sent out this tweet to confirm the existence of this new partnership:
@Nasdaq and VanEck’s @MVISIndices announces #index #partnership and intention to bring to market transparent, regulated and surveilled #DigitalAssets products, such as #Bitcoin futures contracts. More info to come. Share & follow us. #crypto #futures #SMARTS #ConsensusInvest pic.twitter.com/Q2oCZx4pp1— Gabor Gurbacs (@gaborgurbacs) November 27, 2018
Cryptoasset data provider CryptoCompare will provide data for the new futures contracts in partnership with VanEck’s subsidiary MVIS (MV Index Solutions).