Nasdaq Plans to Launch Bitcoin Futures in First Half 2018

Nasdaq Inc. is planning on bringing bitcoin to a greater pool of investors, as the digital currency’s price briefly surpassed $11,000 last Wednesday.

The New York-based exchange operator plans to introduce bitcoin futures early next year, becoming the third major U.S. exchange to dive into the red-hot market for cryptocurrencies. Nasdaq will introduce the products as early as the second quarter, and the contracts will trade on its NFX market, according to the person, who asked not to be named discussing a private matter.

The offering will pit Nasdaq against two bigger competitors, CME Group Inc. and Cboe Global Markets Inc., both of which already announced plans to offer cryptocurrency derivatives. Nasdaq is a comparatively small player in the futures market, which may make it harder to cultivate an image as a destination for cryptocurrency derivatives trading.

“They’re a small futures exchange, so they possibly see the potential to get into a product that could be much larger some day,”

said Rich Repetto, an analyst at Sandler O’Neill & Partners LP.

Allan Schoenberg, a Nasdaq spokesman, declined to comment.

Bitcoin currently trades on virtually unregulated markets. Nasdaq, CME and Cboe are heavily regulated, bringing an air of legitimacy that should help professional investors feel more comfortable participating. Anyone on the sidelines has missed out on a massive rally: Bitcoin’s price has increased in value by more than 11 times in 2017.

“It’s a great example of the increasing institutional interest in this new asset class,” said Adam White, general manager of GDAX, a cryptocurrency exchange owned by Coinbase. “The emergence of derivatives will help with the process of price discovery.”

The Wall Street Journal earlier reported on Nasdaq’s plan.

Originally reported on Bloomberg.com