Another exchange operator is looking to introduce bitcoin futures. Nasdaq Inc. could launch futures based on the soaring cryptocurrency next year. Nasdaq is the third US-based exchange operator to announce plans for bitcoin futures.
“The New York-based exchange aims to introduce the products as early as the second quarter, according to the person, who asked not to be named discussing a private matter. The contracts will trade on Nasdaq’s NFX market, the person said,” reports Bloomberg.
Nasdaq did not comment on the news. Several weeks ago, bitcoin surged after CME Group Inc., the world’s largest exchange owner, announced its plans to introduce bitcoin futures by the end of the year. The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Bitcoin futures will be listed on and subject to the rules of CME.
Cboe Global markets, an exchange operator competing with CME Group to introduce bitcoin futures, recently announced its intent to offer contracts based on Gemini bitcoin market data by the end of this year or early next year, but the exchange is still waiting on approval from the U.S. Commodity Futures Trading Commission, reports Brian Louis for Bloomberg.
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Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.
“There are four exchange giants in the U.S.; Nasdaq joins CME Group Inc. and Cboe Global Markets Inc. in seeking to jump into cryptocurrency derivatives. That leaves New York Stock Exchange owner Intercontinental Exchange Inc. as the only one without public plans for bitcoin derivatives,” according to Bloomberg.
Some market observers believe the launch of bitcoin futures will speed the introduction of exchange traded funds based on the digital currency. In recent weeks, several ETF issuers have also filed plans for blockchain ETFs, which would hold stocks with exposure to the digital currency trade.
Bitcoin traded above $11,000 for the first time earlier Wednesday.
For more information on the cryptocurrency market, visit our Bitcoin category.