NYSE's Owner Resists Rushing Into Bitcoin
December 05 2017 - 5:25PM
Dow Jones News
By Alexander Osipovich
The owner of the New York Stock Exchange is taking a
wait-and-see approach to bitcoin, even as two of his main
competitors prepare for the launch of futures markets based on the
fast-rising cryptocurrency.
"We may be stupid for not being first on that," Intercontinental
Exchange Inc. Chairman and Chief Executive Jeffrey Sprecher told a
financial conference in New York on Tuesday.
But Mr. Sprecher voiced doubts about the wisdom of being the
first U.S. exchange to offer bitcoin futures. Chicago-based Cboe
Global Markets Inc. is set to start trading bitcoin futures on
Sunday, while CME Group Inc. is following suit a week later.
Futures contracts could shake up the bitcoin market by providing
an easy way to "short" the digital currency -- to bet that its
price will fall.
Mr. Sprecher said the bitcoin market was currently dominated by
buyers, not sellers, and it was unclear who would short bitcoin
when given the chance. Bitcoin sellers, including "algorithmic
guys," could seize upon the launch of futures to exit big bitcoin
positions, the ICE CEO said.
That could lead to blowback against futures exchanges, he added.
"I look at that and just say, is that going to work out well for me
as a venue?" Mr. Sprecher said.
Mr. Sprecher also suggested that the underlying exchanges where
bitcoin is traded are "not particularly transparent" and that it
was premature to use them as the basis for a new futures
contract.
Both CME and Cboe have partnered with bitcoin exchanges to
generate a daily price index, which their planned futures will
track. Their announcements that they would launch bitcoin futures
were seen as a vote of confidence in the digital currency, whose
reputation remains tarnished by its association with illicit
activity.
ICE is involved in cryptocurrencies through its investment in
Coinbase, a San Francisco-based provider of "wallet" services that
people can use to hold bitcoin. NYSE also publishes a bitcoin price
index and has unsuccessfully sought to list exchange-traded
products tied to bitcoin.
Bitcoin has drawn intense investor interest this year, largely
due to an extraordinary run-up in its price. It hit a new record of
$11,860.24 on Tuesday, a more-than 12-fold increase from the
beginning of the year, according to CoinDesk. Skeptics call bitcoin
a bubble.
Write to Alexander Osipovich at
alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
December 05, 2017 17:10 ET (22:10 GMT)
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