Nasdaq’s 7 Trillion Dollar Muscle Flexes Toward the Future
Widely circulated reports on 29 November reveal Nasdaq will set a bitcoin futures market by the middle of next year. Cantor Fitzgerald LP is to offer a bitcoin derivatives platform on its exchange around the same time.
Second only to the New York Stock Exchange (NYSE), Nasdaq is a really big deal within securities exchanges. It is known as a haven for technology-related equities. Cantor Fitzgerald LP is a trusted financial services player, one of only 22 to trade US government securities at the Fed (since 2006).
Stephanie Yang and Alexander Osipovich write: “The emergence of bitcoin futures would be a big step toward maturity for the cryptocurrency, which is less than a decade old. By letting traders bet on whether bitcoin rises or falls, a futures market would make it easier for both big banks and retail investors to trade bitcoin.”
Nasdaq has flirted with bitcoin on a European exchange, but this marks a wholesale entry into a completely different market. Bitcoin has long been thought in professional circles to be too volatile in price swings to be taken seriously. Its popular association in media accounts with crime and terrorism scares hasn’t helped either.
However, keen money managers often look beyond the hype and pearl-clutching, discovering in bitcoin not only a currency, payment system, and store of value, but also a great new way to enforce contracts and other functions.
That bitcoin has been closing in on a five-figure price floor has probably assisted in hastening their respective decisions.
Cantor Fitzgerald to go Crypto
“Nasdaq’s bitcoin contract would debut on Nasdaq Futures, or NFX,” Ms. Yang and Mr. Osipovich detail. NFX is “a marketplace that the New York-based exchange group launched in 2015 that until now has mainly focused on energy trading, according to the people familiar with the situation.”
Nasdaq and CME have long chased one another for markets. It’s no surprise they’re going to soon compete for crypto dominance. “Nasdaq has briefed market participants on its plans,” the Journal noted.
For its part, Cantor will offer bitcoin derivatives.
Cantor’s brokerage chief, Shawn Matthews, explained during an interview, “The asset class is not going away. If you look at the next level, it will be the institutions coming in and being the larger participants in the marketplace, especially as liquidity gets better.”
Though not known for its futures acumen, Cantor has a coveted advantage in that it already holds a license from the industry regulator, the Commodity Futures Trading Commission (CFTC).
“The firm aims to launch a bitcoin swap—a type of derivative—on Cantor Futures Exchange LP. Cantor’s swap would allow traders to bet on bitcoin prices up to three months out, with built-in protections to limit their losses if bitcoin prices swung above $15,000 or below $5,000,” the Journal explained.