U.S. exchange operators believe in cryptocurrencies: Cboe

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U.S. exchange operators believe in cryptocurrencies: Cboe

By Aparajita Saxena

 

Bitcoin (virtual currency) coins placed on Dollar banknotes are seen in this illustration picture, November 6, 2017. REUTERS/Dado Ruvic/Illustration/Files

 

(Reuters) - The major futures exchanges believe in the development of cryptocurrency trading and will push on with launching exchange traded funds that allow investors to trade in them, Cboe Global Markets Inc's <CBOE.O> chief operating officer said on Tuesday.

 

Speaking on a conference call, Christopher Concannon and other Cboe executives declined to say when they expected regulatory approval for a bitcoin exchange traded fund they announced earlier this year.

 

His tone contrasted with the dismissal of bitcoin as a major financial market by some senior bankers.

 

"Over time, we do envision (our bitcoin) ETF coming to market once the regulated futures market is built and ... we're encouraged by everyone's focus on this space," Concannon said.

 

"Overall, the cryptocurrency space is the space that I think we believe in and certainly our competitor across town believes in as well and I'm just encouraged by that validation."

 

U.S. exchange operators have been looking to diversify their income avenues to reduce dependency on trading, especially at a time when market volatility has fallen to record lows.

 

"Their main business has been slow and that can only take you so far. So, they want to participate in fast-growing markets and the market for trading crypto-assets is now large enough for them to participate," said Gil Luria, director of research at D.A. Davidson.

 

Luria added that he expects some larger banks to start participating in the cryptocurrency market.

 

Cboe, the owner of Chicago Board Options Exchange, recently signed a deal with cryptocurrency exchange Gemini for bitcoin data that will support the Chicago bourse’s plans to list bitcoin derivatives. (http://reut.rs/2iBxSTn)

 

Rival CME Group Inc <CME.O>, the world's largest derivatives exchange operator, said last month it will launch a futures contract for bitcoin later this year.

 

Bitcoin breached the $6,400-mark on the BitStamp exchange after the CME news. The currency <BTC=BTSP> is now trading above $7,000.

 

In an interview with Reuters earlier in the day, CME Chairman Emeritus Leo Melamed said the currency is likely to become a new asset class in its own right, like gold or stocks, which can be traded and regulated.

 

"We will regulate, make bitcoin not wild, nor wilder. We'll tame it into a regular type instrument of trade with rules," Melamed said.

 

Bitcoin's legitimacy has often been called into question because of the currency's association with Silk Road, an online black market for illegal drugs.

 

China has already forced several bitcoin exchanges to close down, while Russia's central bank said it would ban cryptocurrency trading websites. JPMorgan <JPM.N> Chief Executive Jamie Dimon has blasted cryptocurrency as a "fraud".

 

None of that has deterred investors who continue to buy bitcoins, pushing it up more than seven-fold this year.

 

(Reporting by Aparajita Saxena and Nikhil Subba in Bengaluru; Writing by Patrick Graham; Editing by Saumyadeb Chakrabarty)

 

-- © Copyright Reuters 2017-11-07

[Enoon]

 

Alchemy.

 

They've conjured gold out of thin air.

 

 

[BuaBS]

19 hours ago, Enoon said:

 

Alchemy.

 

They've conjured gold out of thin air.

 

 

Same as printing fiat currency.

[Proboscis]

17 minutes ago, BuaBS said:

Same as printing fiat currency.

Except . . . fiat currency is issued and controlled by a monetary authority. It does not eventually run out, as cyptocurrency does when the cost of mining another unit becomes prohibitive. Fiat currencies can expand to suit the size of the economy whenever required - no quantitative easing with bitcoin. You can pay your taxes in that jurisdiction with the relevant fiat currency, thereby creating a demand for your fiat currency.

 

We have seen it all before - tuilips in Holland, for instance.

 

[BuaBS]

7 hours ago, Proboscis said:

It does not eventually run out, as cyptocurrency does when the cost of mining another unit becomes prohibitive.

True , "printing" fiat costs nothing , but don't fall for the "finite-ness" of crypto's. They just create parallel ones , aka forks . Look at bitcoin cash & soon bitcoin gold ( which has nothing to do with gold) . As soon as mining another unit becomes prohibitive or they come closer to the 21 million , there will be more of the same via forks or software updates ,...or whatever they come up next. All transactions are recorded and that amount will get so big that they have to change it .

 

 

[phycokiller]

On 11/9/2017 at 10:23 AM, Proboscis said:

Except . . . fiat currency is issued and controlled by a monetary authority. It does not eventually run out, as cyptocurrency does when the cost of mining another unit becomes prohibitive. Fiat currencies can expand to suit the size of the economy whenever required - no quantitative easing with bitcoin. You can pay your taxes in that jurisdiction with the relevant fiat currency, thereby creating a demand for your fiat currency.

 

We have seen it all before - tuilips in Holland, for instance.

 

actually tulips are completely different, theres was no limit on how many could be made, unlike bitcoin, making them eventually worthless

[Proboscis]

1 hour ago, phycokiller said:

actually tulips are completely different, theres was no limit on how many could be made, unlike bitcoin, making them eventually worthless

Not quite. While you are correct, there is no limit to how many tuilips can be made, not every tuilip was worth the same. The very rare that had beautiful colours were the most prized, or at least their bulbs were. So there was a limit.