Bitcoin spent the better part of a decade on the fringes of the financial system. While markets recovered from the 2008 financial crisis, Bitcoin was slowly building a following and collecting attention. However, even as it soared in value last year, it remained a pariah in the investment world. It was beloved by individual investors, but institutions unanimously shunned its adoption.
J.P. Morgan Chase CEO, Jamie Dimon famously described Bitcoin as a fraud, and, even though he has retreated from those comments, they are illustrative of the hostile nature between mainstream financial institutions and the cryptocurrencies.
Interestingly, more than a year into an extraordinary rise in popularity and value, Bitcoin is proving irresistible to the financial elites.
A New Crypto Trading Platform in the Works
On Monday, The New York Times reported that Intercontinental Exchange, which owns the New York Stock Exchange, is developing a digital trading platform for Bitcoin. Although there are few details about the initiative, it’s expected to give wealthy investors access to Bitcoin without using one of the many, unregulated cryptocurrency exchanges.
It appears that the investment platform is still in the planning stages and there is no imminent announcement about its launch. According to the Times:
“Details on the platform that Intercontinental Exchange is working on have not been finalized and the project could still fall apart.”
The account is based on four sources at Intercontinental Exchange who requested anonymity because the plans were not yet finalized. In addition, the Times was provided internal emails and documents to verify the scope and intention of the project.
New York Times writer, Nathaniel Popper, who authored the article, took to Twitter to explain that the Intercontinental Exchange’s platform would provide investors with actual Bitcoin rather than derivatives like Bitcoin Futures.
The Intercontinental Exchange and LedgerX, another regulated virtual currency exchange, had both discussed offering a contract tied to the value of Ether but have put that on hold because of the regulatory uncertainty surrounding the second largest virtual currency.
— Nathaniel Popper (@nathanielpopper) May 8, 2018
In follow up comments, Popper also noted that Intercontinental Exchange and LedgerX were considering an Ether-centered investment product, but they shelved those plans because Ethereum’s regulatory future remains uncertain. Currently, no mainstream financial institutions offer an Ethereum-related investment product.
A Growing Trend
When commodity exchanges Cboe and CME launched their Bitcoin futures products last December, they were the first mainstream operation to formally embrace digital currencies.
At this point, their actions seem like a prelude to continued adoption at significant financial institutions.
Last week, Goldman Sachs confirmed that it would begin operating a Bitcoin futures trading desk that would increase the availability of Bitcoin derivatives to interested investors.
Their announcement closely coincides with a surge in popularity for Bitcoin futures. After months of relative stagnation, Cboe and CME experienced a significant uptick in contract movement at the end of April.
Crypto investors have long believed that institutional money would a driving force for its future growth and proliferation.
Since hitting an all-time high at the beginning of the year, crypto markets have been decidedly less robust in the first third of 2018.
If Intercontinental Exchange’s ideas come to fruition, it would serve as the first foray into direct digital currency ownership for institutional and high-dollar investors.
Crypto markets soared on the power of interested individuals, so it’s exciting to consider the possibility that more opportunity for large investors could push markets even higher.
Cover Photo by Saketh Garuda on Unsplash