Business 28 November 2018

Ed Drake

Nasdaq defies plummeting prices to push ahead with crypto futures in 2019

Stock exchange firm Nasdaq will reportedly continue with plans that will see them launch BTC futures in 2019 despite the ongoing price slide, according to sources close to the company.

The decision puts Nasdaq at odds with the trajectory of crypto markets, which have continued to wane throughout 2018 as investors increasingly flee the legacy cryptocurrency in favour of more sophisticated alternatives.

Nasdaq has reportedly been working closely with U.S. regulators on the plans, namely the Commodity Futures Trading Commission (CFTC), to bring BTC futures on stream by early 2019, according to Bloomberg.

BTC futures were first introduced in December 2017, launching on exchanges Cboe Global Markets and CME Group. Shortly thereafter, prices began their slide from highs of near $20,000 down to their current level, under $4,000.

After the launch of futures contracts on these exchanges, the CFTC introduced tighter guidelines for listing derivatives based on digital assets, building on the self-certification process used by Cboe and CME at launch.

Back in January, Nasdaq CEO Adena Friedman said the firm was contemplating ways of making its futures distinct from those available at other exchanges.

According to sources familiar with the plans, the Nasdaq futures will use prices from a number of spot exchanges, versus the handful used for pricing instruments on Cboe and CME respectively.

The spot prices will be compiled by VanEck Associates, a firm which has been seeking approval separately from the U.S. Securities and Exchange Commission for an ETF that will track a selection of cryptocurrencies.

The move coincides with similar plans from rival New York Stock Exchange, which is slated to launch its own futures contracts on Jan 24.

With the BTC collapse effectively wiping out the gains made over much of 2017, it remains to be seen whether the demand still exists for BTC futures, and whether these new instruments will hasten the decline of BTC prices as the token continues its descent into obsolescence.

Neither representatives from Nasdaq or VanEck, nor the CFTC, were available for comment on the matter.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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