NASDAQ is preparing to launch bitcoin futures in the first half of 2018 according to a new report from the Wall Street Journal, which cited people familiar with the situation.
NASDAQ Inc. and broker Cantor Fitzgerald LP will join forces to trade bitcoin futures. They’re part of a growing group of mainstream financial companies seeking to add bitcoin to their offerings.
Last month, two major Chicago exchange operators – including CME Group, the largest futures and derivatives market in the world – announced plans to launch bitcoin futures.
In a separate statement, Cantor Fitzgerald LP announced plans to launch their own bitcoin futures on an exchange they own.
Obviously, NASDAQ is more of a household name than CME Group, which announced plans to release its own bitcoin futures contracts last month. However, CME is a far bigger player in the futures market. CME Group operates the largest futures and derivatives exchange in the world. In comparison, NASDAQ’s futures exchange (NFX) has approximately one-third of the volume of CME’s exchange.
Nasdaq aims to launch the bitcoin futures in the first half of 2018.
Futures contracts, for those out of the loop, are an agreement to buy or sell an asset at a future date at an agreed-upon price. Futures contracts can be traded on an exchange. One party involved in the contract agrees to buy a certain amount of a security or asset at a certain date at a certain price, while the other party agrees to sell it.
Airlines use futures trading to hedge bets against uncertain oil markets. The futures market is also popular with farmers, or anyone involved in commodities markets. Over the years, however, futures trading has branched into stocks, bonds, and other assets. You can trade futures shares of ETFs, for example, or futures contracts for individual stocks and bonds.
One reason futures contracts are popular is the use of leverage. Traders can take a substantial position while putting up a relatively small amount of cash.
In any case, bitcoin futures are officially a thing – and Wall Street is increasingly paying attention to the world’s largest cryptocurrency.