Date
13 December 2017
Intercontinental Exchange has some concerns about the cryptocurrency market, says CEO Jeff Sprecher. Photo: Bloomberg
Intercontinental Exchange has some concerns about the cryptocurrency market, says CEO Jeff Sprecher. Photo: Bloomberg

Intercontinental Exchange holds back on crypto-futures

Intercontinental Exchange (ICE) has put a lot of thought into the idea of futures contracts on cryptocurrencies like bitcoin, but has yet to move forward due to the opaque nature of the underlying markets, its chief executive said on Tuesday.

“We didn’t think it was obvious to rush out a product and be first and settle against an index on a lot of exchanges that are not particularly transparent,” Jeff Sprecher said at a financial services conference in New York, Reuters reports.

ICE, which owns the New York Stock Exchange, was an early mover in the crypto space, buying a minority investment in digital currency exchange Coinbase in 2015.

Still, Sprecher said he was not ready to move forward yet on futures contracts based on the type of assets Coinbase trades.

“I don’t know what to make of cryptocurrencies,” he said at the Goldman Sachs US Financial Services Conference.

Bitcoin’s price has surged more than tenfold this year, hitting a record high of US$11,850 on Tuesday, amid a chorus of warning that it is a bubble on the verge of bursting.

ICE rivals Cboe Global Markets and CME Group will launch bitcoin futures contracts on Dec. 10 and Dec. 18, respectively, with Cboe also planning an exchange-traded fund based on the red-hot digital asset.

Nasdaq has said it will launch bitcoin futures next year.

There have been plenty of buyers flooding bitcoin exchanges with cash lately. But it is harder to figure out who would want to short the contract, Sprecher said.

A lot of the wealth that has been created through the rise of cryptocurrencies has gone to China, where much of the “mining” of the assets happens, and to algorithmic traders who entered the market in its early stages, he said.

“To short that would mean that they have decided to exit and through a legitimate, high-standing, regulated venue, they are exiting, and I look at that and just say, is that going to work out well for me as a venue?”

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RC

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