Digital assets have experienced a dramatic correction in recent weeks, with bitcoin sliding from near $20,000 last month to current levels around $11,247, pressured by a combination of profit-taking a
Digital assets have experienced a dramatic correction in recent weeks, with bitcoin sliding from near $20,000 last month to current levels around $11,247, pressured by a combination of profit-taking and intensifying regulatory scrutiny worldwide. Against this volatile backdrop, Nasdaq is eyeing an opportunity in the futures space.
The exchange's chief executive Adena Friedman disclosed in remarks to CNBC that the company is actively exploring the possibility of launching cryptocurrency futures contracts. This would position Nasdaq as a third major player in the arena, following Cboe and CME's late-2017 entries.
"We continue to look at the risk management around that, making sure we are putting the right protocols in place, making sure there's proper demand, and that the contract is different from what's already out there," Friedman explained. Industry chatter suggests a rollout could arrive as soon as the second quarter of this year, though the company hasn't confirmed any firm date.
What distinguishes Nasdaq's approach is both the structure and the underlying price feed. While Cboe relies on a single bitcoin price source and CME uses four separate feeds, Nasdaq intends to aggregate data from 50 sources. Beyond that divergence, Friedman indicated the firm is considering a "total return futures" product architecture, explaining: "What we might look at is more of a total return futures, so it's a little bit of a different construct." This would position it as more of an investment vehicle than a simple tracking instrument.
Before seeking approval from the U.S. Commodity Futures Trading Commission, Nasdaq must first gauge whether institutional interest exists for such a product. The assessment phase remains a critical hurdle.
Optimism persists in pockets of the industry regardless of recent price weakness. Dave Chapman, a managing director at trading firm Octagon Strategy, has projected that bitcoin will crack $100,000 by the close of 2018. Chapman earned credibility on such calls after forecasting the asset would surpass $10,000 before last year ended—a prediction that met with considerable skepticism at the time. "I think a lot of people thought I was crazy, a lot of people scoffed at me, but that's OK," Chapman remarked in December.
