The New York Stock Exchange is currently preparing to launch its own Bitcoin index funds, so-called Exchange Traded Funds (ETFs). This is apparent from a current application to the US Securities and Exchange Commission. According to Business Insider, five EFTs applied for listing should not be based on Bitcoin price. This would not only be a sign and room for unprecedented speculation about the Bitcoin – it would be another step in the direction of on-skyscraper financial mainstream.
Now also Wall Street: After Bitcoin successfully found its way to the American option exchanges CBOE and CME with the corresponding futures in December, the New York Stock Exchange now wants to go one step further. As evidenced by a document filed with the Securities and Exchange Commission, NYSE applied for the listing of five Bitcoin index funds last week, known as ETFs.
To begin with, index funds or ETFs are generally stock market indices that relate to the performance of a stock index such as the DAX or the Dow Jones. ETFs are often available cheaply from vendors and allow them to invest in entire markets instead of individual stocks.
NYSE now wants to allow its clients to bet on the market value of traded Bitcoin futures rather than Bitcoin prices themselves on the Arca Stock Exchange, a secondary wallet in the heart of Wall Street.
With help of short-term contracts, designed by the option smith Direxion Asset , investors should be able to achieve profits away from the currently volatile Bitcoin rate itself – the listing request. Each time a daily benchmark index value should then be able to bet on the sales value of the CME and CBOE in a daily rhythm.
The aim of this is to lure investors who are skeptical about Bitcoin itself, so the assessment of Dave Weisberger, CEO of the crypto-networker CoinRoutes to Business Insider.
“Investors will see these yield-prone products as a way to capitalize on price volatility without buying the security risks of Bitcoin itself […]”
While NYSE states that the new ETFs are “boosting competition for the good of investors and the marketplace, there are still growing criticals. For example, Josiah Hernandez, strategist at Coinsource, the world’s largest supplier of Bitcoin machines, warns against premature speculation stratification.
“Derivatives may differ significantly from the underlying prices, especially in younger markets such as Bitcoin. This has already happened with futures. […] Developing an ETF on top of that can increase the risk of decoupling the price movement between ETFs and the actual markets. “
Ultimately, the traded funds would have nothing to do with the actual Bitcoin price.
Bitcoin in the stock market mainstream
If NYSE succeeds in the launch, it means a new level for the establishment of Bitcoin on the conventional financial markets – and the trend seems to continue.
Crypto hype confirmed in the announcement of the New York Stock Exchange NASDAQ. As reported, the largest electronic US stock exchange announced that they also want to bring crypto derivatives on the way. Also, the US investment bank Cantor Fitzgerald plans its own Bitcoin contract for the current year.
In European latitudes, alongside the German derivatives exchange Eurex, the British hedge fund Man Groupannounced its intention to make the leap into new business for crypto derivatives. While the US market appears to be picking up , the trend in Europe does not stop – all the warnings of the European Central Bankto defy.
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