Bitcoin to SOAR: NYSE swaps 'revelation' points to cryptocurrency boost
BITCOIN is set to land its biggest boost yet after it was leaked the parent company of the New York Stock Exchange (NYSE) is allegedly working on an online trading platform that would allow large investors to buy and hold Bitcoin.
Following news at the end of last week that global investment giant Goldman Sachs was set to board the Bitcoin bus through its futures-like offering, the New York Times has revealed that the parent company of the New York Stock Exchange has been working on an online trading platform that would allow large investors to buy and hold Bitcoin.
The revelations come according to emails and documents viewed by The New York Times, and the plans remain a closely-guarded secret. However, the news marks a remarkable turnaround for cryptocurrencies and a boon to those in the crypto-community who have claimed that bitcoin is “becoming too big to ignore”.
On the arrival of big City of London and Wall Street players, the CEO of Sequant Capital, George Zarya told Express.co.uk: "It’s where the future of finance is and that’s a very exciting thing to be a part of. Crypto is an extremely vibrant industry and where a lot of the fast-growing tech ‘unicorns’ will be appearing, which naturally encourages investors to get involved.
"Early investors are also realising that some opportunities may be lost as the sector becomes more and more competitive - so they’re getting in now.”
However, rather than the futures contracts offered by Goldman Sachs and Chicago Mercantile Exchange, the parent company of the New York Stock Exchange the Intercontinental Exchange (ICE) will work with ‘swaps’ - a new way of doing things whereby banks can buy a contract that, according to the New York Times, will end with the customer owning Bitcoin the next day — with the backing and security of the NYSE.
Mr Buffett is clearly a shrewd investor, but even the best get things wrong once and a while.
Gene Grant, CEO of VRBex
The NYSE’s approach is innovative albeit even more complicated that an immediate trade of dollars for Bitcoin. However this slightly long-winded way of using a swap contract forces bitcoin trading under the regulation of the Commodity Futures Trading Commission, meaning that it will abide by existing laws.
On Goldman Sachs and the rise and rise of bitcoin in traditional finance markets, Waseem Sadiq, CEO, and founder of Tradebits.co. told Express.co.uk: “We are seeing a crypto exchange with 200 employees after just eight months of operation overcoming one of Europe’s largest financial institutions with more than 100,000 employees that has been in business for 148 years.
“This clearly shows that there are tremendous opportunities for new revenue streams if institutions are able to properly integrate cryptocurrencies into their business models.”
ANALYSIS
Rodrigo Marques - CEO of investment platform Atlas Quantum told Express.co.uk that if the rumours about NYSE´s affiliated company ICE are true, "this is a big move by institutional investors," and shows, "that a move to a more professional cryptocurrency trading market is well underway."
On the nuts and bolts of the NYSE offering, Mr Marques says that we're seeing a collision of the old and the new guard.
He said: "Since the custody of bitcoin is a complex issue for traditional institutions to handle, we are seeing indirect mechanisms of exposure - such as futures, swaps and other derivatives - gaining traction.
"It's also fair to say that these type of mechanisms are well understood by the old guard, meaning they provide much less regulatory uncertainty. And as we've seen recently, increasing clarity over regulation is a positive step for everyone involved."
Gene Grant - CEO of VRBex, says that new of the NYSE's bold step, "supports our belief that the cryptocurrencies represent a new asset class."
He said: "Clearly there are a number of players looking to enter the space. It is unclear the extent of their preparations or the timing of the actual launch. Without that information it is difficult to ascertain if the preparations are advanced and it is an imminent launch, or if they are simply using the news cycle for publicity.
"We were working on our exchange development for over 6 months, and we are happy to read that other serious competitors are preparing to enter the market."
Asked what signal this news sends to Warren Buffett and the family of investors who have been rather disparaging over the weekend, Mr Grant said: "Mr Buffett is clearly a shrewd investor, but even the best get things wrong once and a while."