Bitcoin saw its greatest moments last year as prices grew to almost $20,000. At the height of its journey, it drew interest from mainstream investors which led to the introduction of bitcoin futures contract by Cboe in December. The news of this supported bitcoins rally but at the end of the first tenure in January, bitcoin had lost about half of its value when the first contracts were first issued.
As bitcoin struggles to regain its value, it seems here something it did not lose; a growing interest from traditional financial players.
20 percent of Financial Companies to trade cryptocurrency soon – Thomson Reuters Survey
At least, 20 percent conventional financial companies will introduce Blockchain-based cryptocurrency trading by 2019, according to a recent survey conducted by Thomson Reuters. For its study, Thomson Reuters polled 400 financial companies which include bank trading desks, hedge funds, and big asset managers. The survey showed that 20 percent of them were considering cryptocurrency trading within the next 12 months with most of them planning to start in the next three to six months.
These survey results reflects the reality of cryptocurrency appeal to traditional investors and institutions. Some major institutions have introduced cryptocurrency trading.
In April, Canadian exchange company TMX Group, introduced OTC (over-the-counter) cryptocurrency trading featuring bitcoin and Ethereum. The group, which operates the Toronto Stock Exchange, established the Shorcan Digital Currency Network (Shorcan DCN) to handle the cryptocurrency trades. Shorcan DCN works with decentralized financial services company Paycase Financial Corp and top Canadian bank, BMO Financial Group.
Nasdaq and Goldman Sachs interest in Cryptocurrency
In the US, Nasdaq CEO refused to rule out cryptocurrency trading. Gemini cryptocurrency exchange, whose market prices are used for Cboe’s bitcoin futures contracts, recently agreed to use NASDAQ’s market monitoring tool, SMART to detects fraud. The new sparked questions about Nasdaq’s interest in cryptocurrencies. Adena Friedman last week told CNBC that the exchange was “all in” for Blockchain and would consider launching a cryptocurrency in the future.
More Recently, Goldman Sachs is planning announced that it will begin trading bitcoin futures for its clients in a matter of weeks. He decision which has gone through its board will see the bank use its money to trade the futures contracts on behalf of clients which want to hold bitcoins.
Japan’s top banks to launch cryptocurrency exchanges
In Japan, banking giants SBI Group and Mitsubishi UFJ Financial Group are reportedly planning to launch separate cryptocurrency exchanges. SBI will launch SBI Virtual Currencies while Mitsubishi UFJ plans to go a step further by developing its own cryptocurrency, the MUFG coin to help provide a stable transaction mechanism.
Interest in Cryptocurrency and Cryptocurrency Regulations
The growing interest in cryptocurrency trading desks by financial firms can be narrowed to interests of individual clients and to some extent the regulations in the country. In Japan where cryptocurrency operators are legal and regulated, traditional financial companies can easily add a cryptocurrency services to their offering. However in Russia, for instance, The Moscow exchange indicated interest in entering the crypto market but will have to get past the Central Bank of Russia which is opposed to cryptocurrencies. Schmidt who was recently employed to head Goldman Sach’s Virtual currency services said he intends to offer more than futures contracts if regulations permit.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.