The drawdown incryptocurrency markets has not affected Nasdaq’s plans to list bitcoin futureson its exchange. Joseph Christinat, vice president at Nasdaq, said his organization had put “a lot of money and energy” into the initiative. “We’re doing this no matter what,” he said, adding that the futures would be availablein the first half of next year. An earlier Bloomberg report cited anonymous sources who confirmed the move.
In a January interview, Nasdaq CEO Adena Freidman had said that the exchange was lookinginto designing new types of futures, different from current products that trackbitcoin price at cryptocurrency exchanges. Instead the New York-based exchange was planning on “Total Return” futures that were more of an investment ratherthan tracking products, she said. At the recent Consensus Invest conference, investment management firm VanEck also announced a futures product in partnership withNasdaq. The product uses Nasdaq’s SMARTS software to detect suspicious tradingactivity.
Nasdaq futures enter an increasingly crowded space. CME and Cboe began offering cash-settled bitcoin futures last December. Bakkt, a crypto trading exchange from ICE – owner of NYSE, was scheduled to commence trading of its physically-settled futures product during the first week of December. But it postponed the launch by a month recently. “As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto,a new asset class to which these resources are being applied. So it makes senseto adjust our timeline as we work with the industry toward launch,” Kelly Loefler, CEO Bakkt, wrote in a Medium post.
Nasdaq’s entry is also a sign of increased oversight and regulation for bitcoin, whose proponents otherwise disdain government regulation. Loefler and Jeffrey Sprecher, CEO of ICE, made the case that regulated exchanges were important to maintain democracy in trading at the Consensus Invest conference. “Regulatory oversight brings confidence for investors,” said Sprecher. “Confidence-building is really important for them. They’ve seen us take action in cases in the coffee industry.”
The move by trading markets to introduce bitcoin futures trading products is a bet that bitcoin and other cryptocurrencies are here to stay and will demonstrate further volatility in the future. It has occurred even as cryptocurrency markets are crashing. November witnessed increased volatility and price declines in cryptomarkets as bitcoin cash, a cryptocurrency, underwent a contentious fork.