After an incredible day when the price of the crypto currency Bitcoin fluctuated between $11,500 as a high and dipping to a low of $9,000, the price has now settled around the $10,200 mark which seems to be another testing point before yet another surge. However senior financial figures such as the Vice President of the European Central Bank have warned against buying the digital asset at very high prices as they could be hurt very badly if the price dips. However that shows no real signs of happening at the moment although further wild dips are not excluded.
The vice president of the European Central Bank (ECB) has said that investors are taking a ‘risk’ by buying bitcoin at its high price.
Speaking to CNBC on Wednesday, Vitor Constancio, said:
It’s a very particular asset, it’s a speculative asset by definition looking to the developments in its price. Investors are taking that risk of buying at such high prices.
Constancio’s comments come at a time when the digital currency is experiencing a surge in value. Earlier today, it was reported that bitcoin had risen to over $11,000 along with a rise in various alt-coin prices. To date, the cryptocurrency has increased by over 1,000 percent, a colossal undertaking considering it was trading at $1,000 at the beginning of the year, and has overcome numerous obstacles.
Some, though, are still expecting great things from bitcoin. Mike Novogratz, a billionaire investor and hedge fund manager, believes that it could ‘easily’ rise to $40,000 by the end of 2018. However, at a recent conference in New York, he stated that it wouldn’t be easy getting there, adding:
There will be wild crashes in it because you’re going to get to levels so far ahead of where the technology’s at.
Central banks, though, have continually been reluctant to embrace the market. The ECB vice president said earlier this month that digital currencies will never replace the fiat system, adding that they were a ‘misnomer‘ merely used as a speculative asset.
At the time, he stated:
The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes.
Mario Draghi, the ECB President, has also spoken about the digital currency market, claiming that they aren’t ‘mature‘ enough for the central bank to consider regulating them. More recently, Draghi stated that they pose little threat to the central bank-dependent financial system, despite the rise in the cryptocurrency market.
Not only that, but Constancio believes that central banks don’t need to take the digital currency market seriously. During the interview, he said:
…in the sense that we don’t have responsibility or even instruments that point to particular prices of particular assets, that is certainly not the role of central banks.
Yet, regardless of the fact that the crypto market, in particular bitcoin, have been criticized by various financial CEOs, it looks as though it has its foot firmly in the door and isn’t going away anytime soon. Not only that, but we may soon be reading headlines that the combined crypto market has become more valuable than JPMorgans.
The $6.831 trillion stock market Nasdaq, the world’s second-largest stock exchange behind New York Stock Exchange, will enable bitcoin futures trading by mid-2018.
Nasdaq and Cantor to Integrate Bitcoin by First Half of 2018
A Wall Street Journal report revealed that Nasdaq and Cantor Fitzgerald & Co. will list bitcoin futures within the first half of 2018. The two financial institutions are “rushing” the integration of bitcoin given the cryptocurrency’s recent surge in price, to $11,441.
According to sources familiar with the Nasdaq’s plans for a bitcoin futures exchange launch, Nasdaq’s bitcoin futures and contracts will be listed on Nasdaq Futures. Through that, investors in the traditional finance sector and stock brokerages will be able to engage in bitcoin trading.
In an interview with WSJ, Cantor, a major US-based financial firm, also revealed that it intends to launch bitcoin futures and derivatives on its flagship exchange.
Shawn Matthews, chief executive of Cantor Fitzgerald & Co., stated that cryptocurrencies are a new asset class that “is not going away,” and that bitcoin is here to stay.
The asset class is not going away. If you look at the next level, it will be the institutions coming in and being larger participants in the marketplace, especially as liquidity gets better.
Cantor’s futures exchange has already been approved by the US Commodities and Futures Trading Commission (CFTC), and considering that CFTC has approved several bitcoin futures listings including the bitcoin options, derivatives, and futures exchange of LedgerX, regulatory hurdles of Cantor in listing bitcoin are expected to be minimal.
Nasdaq’s Bitcoin Integration Will Trigger Other Exchanges to Adopt Bitcoin
Other major exchanges including Nodal Exchange are actively investigating the potential of listing bitcoin futures on their regulated exchanges and trading platforms.
John D’Agostino, a former Nymex executive, told WSJ that every department of every regulated exchange is considering listing bitcoin futures, and that the number of bitcoin futures exchanges will drastically increase throughout 2018, as leading exchanges and markets such as CBOE, CME, Nasdaq, and Cantor move to implement bitcoin.
“Every research department of every regulated exchange is saying, ‘Can we do this?. The majority of costs associated with that are marketing. If people want to trade this thing, why wouldn’t you?. This is a gift from the heavens,” said D’Agostino.
In early 2017, the integration of bitcoin futures could have required marketing to a certain extent to attract investors within the traditional finance sector. Currently, the mere act of integrating bitcoin is an impeccable marketing strategy. Some reports revealed that if multi-billion dollar companies like Overstock switch their businesses to cryptocurrency-focused ventures, they are likely to see 70 to 100 percent increase in sales and market valuation.
Given the rapid increase in the mainstream adoption of bitcoin and the rise in demand for cryptocurrencies, every exchange in the US and in the global finance market is planning to integrate bitcoin in the short-term. Nasdaq’s listing of bitcoin futures will trigger more exchanges to pursue the path of bitcoin futures in the upcoming months.