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Jeff Sprecher, the chief executive of The International Exchange Inc., and the owner of The New York Stock Exchange has pointed out that they are considering the possibility that Bitcoin will become more popular in the time to come as it picks up popularity as the market is slowly but surely recovering.

He also commented on the fact that most exchanges aren’t regulated and stated that the reputable exchanges that started working with futures contracts have put themselves in an advantageous position.

Sprecher has made a statement to the effect that the crypto industry has a lot of potential in the long run, and is worth considering if we’re talking futures contracts, like CME Group Inc. (Chicago Mercantile Exchange Inc.) and Cboe Global Markets Inc. did, even though there are a few risks associated with the volatility of the market.

“There is a trend here we can’t ignore in my mind, so I don’t discount it,”

– Sprecher said on Bitcoin’s bounceability –

“People put more faith in a guy named Satoshi Nakamoto that no one has ever met than they do in the U.S. Fed. People are more comfortable in technology than the institutions of government and society that I grew up with.”

Even the recent decline in price didn’t seem to stop NYSE from entertaining the idea of taking the cryptocurrency industry seriously given sufficient security measures.

“We may be stupid for not being first on that,”

– Sprecher said as he pointed out the competition has acquired the Bitcoin futures, which is something he feels he perhaps should have done first. There are only a few exchanges in the business that have been regulated and that have been in the business for a few years, and those buyers that are after large volumes of Bitcoins will essentially flock to exchanges like the CME Group, creating massive trading volumes.

Why doubt Bitcoins?

Bitcoin’s volatility has long been the apple of discord, and the fact that its price depends massively on its reputation means that there will be a lot of a price spread, which in turn means a lot of liquidity issues. The fact that the market was highly unstable caused Sprecher to take a step back and assume a somewhat skeptical position on Bitcoin futures back in 2017.

While it is understandable that traditional institutions would be skeptical about a market which was pretty much based on speculation and not tied to any tangible assets (as the CFTC points out below), now it is possible, Sprecher says, that there was a missed opportunity there, although not necessarily so.

Sprecher added that the Bitcoin market was not only somewhat unstable but that it relied heavily on exchanges, the structure and operations of which were not entirely see-through, so it was possibly unwise for his company to get involved. Sprecher pointed out that this is still a risky business: people have more faith in someone they have never met rather than the government.

Why green-light Bitcoins?

Is it worth adopting crypto considering all the risks? CME, CFE, and Cantor Exchange meanwhile have been making their relationship with Bitcoin futures official. J. Christopher Giancarlo, The Commodity Futures Trading Commission Chairman, has said on the matter:

“Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past. As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE, and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets. In working with the Commission, CME, CFE and Cantor have set an appropriate standard for oversight over these bitcoin contracts given the CFTC’s limited statutory ability to oversee the cash market for bitcoin.”

They have also issued the warning to all users:

“Market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. There are concerns about the price volatility and trading practices of participants in these markets. We expect that the futures exchanges, through information sharing agreements, will be monitoring the trading activity on the relevant cash platforms for potential impacts on the futures contracts’ price discovery process, including potential market manipulation and market dislocations due to flash rallies and crashes and trading outages. Nevertheless, investors should be aware of the potentially high level of volatility and risk in trading these contracts.”

The CFTC has stated the objectives of their mission, which they will work on along with a number of organizations, outlined above, as well as The National Futures Association:

“The CFTC will monitor markets and work closely with the exchanges to avoid systemic risk and to protect market users and their funds, consumers and the public from fraud, manipulation and abusive practices related to products that are subject to the Commodity Exchange Act.”

We will warn the reader once again, despite our never-ending enthusiasm with regard to the future of cryptocurrency, to be cautious of the exchanges you choose, take all possible security precautions, and do all the necessary research before trading – at your own risk).

Image by Michael Nagle/Bloomberg via Getty Images.


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