New York Stock Exchange to launch physical Bitcoin futures
Some of the giants on wall street are preparing for Bitcoin, a virtual digital currency. For almost a decade Bitcoin was assigned to the unregulated border of the financial world. The owner of New York Stock Exchange Intercontinental Exchange (ICE), could become the next Wall Street player to provide Bitcoin futures.
According to the sources, which quoted documents and four sources “briefed” anonymous on the proposal for ICE to launch Bitcoin trading options because the plans were still confidential. The parent company has been developing an online platform which would allow huge investors to buy and sell bitcoins.
When the Goldman Sachs publicized the intention to start a Bitcoin trading unit, the news of the virtual exchange also came out.
The steps taken by Goldman and Intercontinental Exchange (ICE), marks a phenomenal shift towards the mainstream for the digital token. The token was once known primarily associated to the underworld and was known as a speculative investment with high risk.
International Exchange (ICE) had discussions with other financial institutions to set up a new strategy through which banks can buy a contract known as a swap. If a customer owns a Bitcoin the next day then the contract will end- with the backing and security of the exchange.
Goldman’s initial approach reflects in the outline predominantly, an executive hinting futures contracts will be the first offering by the bank. Also followed up by more interactions directly with cryptocurrency
Amongst lacking official comment from the ICE, Goldman’s peripheral comments is protruded out against serious criticism by Berkshire Hathaway CEO of Warren Buffet, about bitcoin.
The infamous anti-crypto personage referred to Bitcoin as “rat poison squared” and “harvested baby brains,” Goldman confirmed it had “concluded Bitcoin is not fraud.”
The Microsoft co-founder Bill Gates added his own scepticism, saying he’d “short” Bitcoin if he could.
Bitcoin enthusiast a former trader at Goldman Sachs who set up LedgerX, Paul Chou, said that his company has always concentrated on huge Bitcoin investors rather than small financial institutions.
Mr. Chou said, “The reason we got into crypto was not to partner with a bank, but to replace them, using the shorthand cryptocurrencies, we deal with crypto holders directly in a way that really takes advantage of Bitcoin’s strengths, while avoiding brokers, banks and other institutions that take multiple cuts of the transaction.”
The only exchange that offers the same kind of swaps that ICE has discussed is LedgerX, the exchange founder by Mr Chou. Even though it has recently experienced a trading increase in the recent months’ ICE will start with a lead because every big financial institution already joined the bandwagon.
Currently, regulators are looking at virtual currencies, even the ether, second most widely used digital token has been issued violating the securities and regulations. Bitcoin was not created by just one company or organization; hence it is much safer on the grounds of regulators, believes institutional investors.
Initially, ICE was considering launching swap contract linked to Ether but stepped back due to regulatory uncertainty.
Sources state that Mr Chou also attempted to use Ether at LedgerX but delayed the process to create any product linked to Ether. But when considering Bitcoins, the path seems to be clear for the huge institutions as well said, Mr Chou,
He stated, “The industry is seeing the unprecedented institutional interest for the first time in Bitcoin’s history, I’ve been amazed that the strongest believers in cryptocurrency often start out the most sceptical. It’s a healthy scepticism. But at some point, the perception shifts, and for many institutions — I think we’re finally there.”
Image source: The New York Times