CBOE CEO Reveals What is Keeping Out Wall Street’s Billions From Cryptocurrency Market?

During the conference at a media luncheon on Jan 16, 2019, Ed Tilly, CEO of CBOE (Chicago Board Options Exchange) indicated what is hindering the Growth of Bitcoin Futures and keeping the Wall Street money out of the cryptocurrency market. According to him, Electronic Traded Notes (ETNs) is keeping out wall street’s billions.

Why ETNs are must for the success of Bitcoin Future?

Since Electronic Traded Notes can be denominated in smaller amounts, retail investors can easily access them. On the other hand, an institutional investor who would use Bitcoin futures needs to have a separate account set up to enter into the market. Tilly conveys the importance of ETN as the entry point for institutional investors. He says;

“The power of having that future there is also having an ETN that is more attractive to retail, and then institutions can lay off risk on the listed futures market”,

He asserted that both the products are critical to each other – it becomes a base for both market, wall street and main street. Nevertheless, he sees ETN is easily accessible to average investors and doesn’t have a higher barrier to enter into the market, whereas, Bitcoin futures would demand ‘significant amount of legwork’.

Absent that leg and introducing trackers or notes, I think we will be in this, ‘It trades every day, but it is not the story.

Govt. shutdown delaying the launch of Cryptocurrency products

He says that the regulators are always reluctant to approve ETNs and in tenure of a government closure, it is even more difficult to predict the launch of new products like Ether futures. Moreover, Coingape reported SEC’s latest order on freezing all pending proceeding doesn’t necessarily change the status of Bitcoin ETF Approval. Tilly says that ‘we cannot move for future products;

“I have two regulators that are not taking calls right now, that doesn’t mean there is nothing we are interested in. It means nothing is going to happen in this government shutdown.”

Furthermore, as far as the ETF’s are tied with the regulators, they’re left with a difficult question. With this he says;

“How do I protect the US customer from manipulation in a market that I don’t regulate?. You answer that question, you get your first ETN.”


Regulators are Still Uncertain on Cryptocurrency regulations

The launch of first CBOE’s bitcoin futures in 2017 when the Bitcoin prices reached nearly $20000 was a historical entry and the open interest for the future counts 5306 contracts. However, after a year, the number of open interest declined to 3420 contracts. With this, Tilly also talks about the success behind CBOE’s Volatility Index (VIX) futures which significantly has 370,354 contracts in open network on Thursday, 17th Jan 2019. Consequently, he adds that there are a number of financial products in connection with the VIX contract.

“Why is VIX successful? Really calls upon the pool of liquidity in the S&P 500. Oh, and there is an institutional futures contract that is traded at the CME. There is a most successful ETF, SPDR. There are trackers and replicating notes that lever up that exposure. All of that works together.”

While appreciating VIX’s contract, he adds that the crypto market has also tried offering new financial products to the market but regulators are uncertain to approve. Tilly link the growth of bitcoin with the approval of ETFs by regulators however, we have seen SEC in the month of August 2018 has already rejected 9 ETFs including Winklevoss Bitcoin Trust.

Seems like Govt. shutdown is affecting the crypto market and product launches are getting delayed. Further, the rumors that Trump might call for an emergency situation if true is not a very good sign for the cryptocurrency market. 


Source
Author: Tabassum
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CBOE May Support Ethereum Futures

The Chicago-based CBOE is reported to be launching Ethereum futures in the impending months. This information, reported by Business Insider, would make CBOE the first United States exchange to have such a listing.

LIONBITReducing The Risk

In cryptocurrency, futures trading allows investors to buy or sell a specified asset at a chosen price at a specific date in the future. These trades are used to mitigate investment risk, as the contract between investor and exchange is immutable.

The source states that futures may launch by the end of this year, with the Winklevoss twins cryptocurrency exchange, Gemini, providing the pricing data. Gemini already provides the data for CBOEs Bitcoin futures which started late last year.

Before moving forward, CBOE wants some extra overlook from the Commodity Futures Trading Commission (CFTC). This group is lead by a Christopher Cryptodad Giancarlo, who has always been fond of cryptocurrencies.

Its important to note that the Securities and Exchange Commission (SEC) doesn’t consider either Ether or Bitcoin as a security. This means that CBOE may face less of a challenge in establishing Ethereum futures due to a lack of regulation surrounding the asset.

TIPFrom BTC to ETH

As one of the exchanges to push Bitcoin futures, it only makes sense that CBOE would jump on Ethereum next. The coin is second in market cap only to Bitcoin, with a convincing use case to boot. That’s not to mention CBOEs interest in all sorts of different cryptocurrency projects fuelling this choice.

However, some have argued that futures trading increases the possibility of shorting the price of an asset. In a market as volatile as cryptocurrency, that is a genuine issue that could contribute to a substantial decline in Ethereum’s pricing.

Cryptocurrency moving into the mainstream is becoming more and more likely. CBOE has also been looking into Bitcoin ETFs, while Gemini is getting comfortable with the NASDAQ stock exchange as well.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author Max Moeller 
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AVATARAPeoples Token

ETF Faces Chicken-And-Egg Problem: CBOE President

Chris Concannon, president and CEO of the Chicago Board Options Exchange (CBOE), explained that there are still obstacles that must be overcomed before the Securities and Exchange Commission (SEC) approves the first bitcoin-backed exchange traded fund (ETF).
“As we chip away at their issues to make them less concerned, at some point they’ll be comfortable with an ETF,” Concannon told Bloomberg.
LIONBIT
Speaking about bitcoin futures, Concannon noted that trading in bitcoin futures is still low compared to mature assets such as gold or oil. Insufficient trading volume, in turn, makes the SEC hesitant to approve an ETF, although the introduction of an ETF backed by futures would significantly increase the trading volume in the underlying futures contracts. “It’s a chicken-and-egg problem,” he said.

Back in June, the CBOE filed a proposal for an ETF on behalf of financial firm VanEck. This is the only such ETF that aims to be fully backed by physical bitcoins rather than bitcoin futures contracts. Some experts claim that bitcoin custody is the crucial issue for bitcoin ETF. Meanwhile, nine other ETFs backed by bitcoin futures are also pending decisions by the SEC.

TIP

The fact that the ETF was filed through a veteran financial institution such as the CBOE, and that it will hold real bitcoins in its reserves, has made the entire cryptocurrency community particularly excited about the prospects of this particular ETF. CBOEs boss, however, offered his own perspective on the crypto market by saying:

“I’ve learned that there’s been more articles than volume. It’s a little bit shocking to me the attention this market gets versus its size. The entire crypto market is a fifth of Apple.”


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Fredrik Vold
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