Attendance is 'Off the Charts' at Bitcoin Education Events: TD Ameritrade VP

Steven Quirk, the Executive VP of Trading and Education at TD Ameritrade, an Omaha, Nebraska-based broker that manages one of the world’s largest online trading platforms, has revealed that institutional interest in cryptoassets has increased significantly.

"When You Open The Door," A Lot Of People Will Want To Trade Crypto

Quirk argued that recent fluctuations in the bitcoin (BTC) price have not impacted the level of interest in BTC futures trading.

While speaking at Coindesk’s panel at the Consensus 2019 conference, Quirk said:

We get calls, emails, 60,000 clients have traded something in this complex. As soon as you open the door, you’re going to get a lot of people [who want to trade or invest in digital assets.]

The former Index Market Performance Committee member at the Chicago Board Options Exchange (Cboe) mentioned that attendance has recently been “off the charts” at major Bitcoin events which focus on educating newcomers about cryptoassets. These events have reportedly been facilitated by the management at TD Ameritrade.

Although there have been several reports indicating that mostly millennials are interested in investing in cryptocurrencies, Quirk said that older retail investors have increasingly been asking questions and showing more interest in digital asset-based investments.

Institutions Are Gradually Entering The Crypto Market

Moreover, the management TD Ameritrade, which oversees over $37 billion in assets while recording over $5.4 billion in revenue for FY 2018, has revealed that investment advisors (RIAs) have begun to take more interest in bitcoin futures contracts.

While attending the Consensus 2019 conference, Thomas Chippas, the CEO of the ErisX exchange (which has received investments recently from TD Ameritrade), noted that institutional clients have, in the past year, made substantial investments in cryptoassets.

Chippas also remarked: 

Apologies it’s not happening faster...It’s happening, it’s never going to be fast enough for the people who write headlines.

Strong Demand For Physically Settled Bitcoin Futures

Meanwhile, Quirk confirmed that there are many institutional investors who’re “waiting on the sidelines” as they seem to be interested mainly in a Bitcoin exchange-traded-fund (ETF).

The US Securities and Exchange Commission (SEC) has not yet approved a cryptocurrency-based ETF application and the federal regulator again postponed its decision regarding Bitwise Asset Management’s ETF.

According to Chippas and Quirk, there is also strong demand currently for physically settled bitcoin futures contracts, as investment managers believe these would allow traders to minimize risk by using conventional risk management tools.

Bitfinex Wants to Offer 100x Leverage For Crypto Derivatives Trading

Michael LaVere
  • Bitfinex will offer 100x leverage trading for cryptocurrency derivatives
  • According to the exchange's CTO, the hedging product is "ready for prime time"

Cryptocurrency exchange Bitfinex revealed it wants to offer derivatives products with up to 100x leverage for cryptocurrency traders. 

Hedging On Cryptocurrency Derivatives

Chief Technology Officer Paolo Ardoino told The Block on June 25 that the cryptocurrency exchange was ready to ship a 100x leverage product for certain users. According to the post, the project has been under development for some time and is “now ready for prime time.” 

The product was referenced in last month’s whitepaper published by Bitfinex for its $1 billion private token sale of LEO, stating

“Qualified Bitfinex account holders will be able to trade a new hedging product through a derivatives wallet.”

The whitepaper originally claimed that the new hedging mechanism would be released by the end of June, a timetable that fits with Ardoino’s “ready for prime time” statement. 

Ardoino confirmed that only “verified” customers will be allowed access to the product, given the risks involved in such highly leveraged trades. 

The CTO also took to Twitter to quell user concerns over Bitfinex’s existing 3.3x margin trading. Ardoino explained 100x leverage will be “optional,” and that their current leveraged trading products will be unaffected by the release. 

Big Risk, Big Reward

Bitfinex is looking to compete with rival exchange BitMEX, who already offers 100x leverage through its bitcoin perpetual swap contract. However, Bitfinex claims its product is designed as a legitimate hedging tool for clients, rather than a gambling mechanism. 

Max Boonen, CEO of trading firm B2C2, believes the product will only appeal to retail hedgers, as large investors will shy away from the risks involved in 100x trading. 

According to Boonen, 

“There’s nothing wrong inherently about 100x. But as a commercial hedger you want lower leverage margin. The larger investor wouldn’t want to take the risk of 100X, typically. They don’t want to go balls to the wall.”

The cryptocurrency derivatives market has been heating up. Last week bitcoin-bull Mike Novogratz’s Galaxy Digital announced plans to offer cryptocurrency options contracts.

Binance has also reportedly been exploring futures trading. On June 24, Binance CEO Changpeng Zhao tweeted the exchange had executed its first margin liquidation for a BTC short.