NEW YORK: Bitcoin fans are salivating over the potential of long-awaited legitimacy for the cyptocurrency when futures trading launches this weekend, but experts worry the risks associated with bitcoin’s Wild West-like nature could overshadow the debut.The first bitcoin future trades kick off Sunday at 2300 GMT on Cboe Global Markets Inc’s Cboe Futures Exchange, followed a week later by CME Group Inc’s CME.Nasdaq Inc plans to get into the mix next year, Reuters reported.While Cboe, CME and Nasdaq offer strictly policed trading environments, the underlying bitcoin market is riddled with crypto-exchanges lacking even basic oversight.That has stoked fears of market manipulation, inaccurate pricing and systemic risk to clearing houses.“I’m kind of taken aback by what’s happened in the last three months,” said Richard Johnson, an analyst at Greenwich Associates who owns digital currencies and considers himself a bitcoin bull. ”I’m concerned things are moving a bit too quickly.”Bitcoin’s more than 10-fold upsurge this year has led to warnings of a bubble by the likes of JPMorgan Chase & Co chief executive officer Jamie Dimon, who called it ”a fraud” that will eventually blow up. If suddenly tomorrow everyone decided bitcoin was worthless, it would be worthless, and I'm not sure whether people have really thought that one through,” he said.Traditional banks remain sceptical of dealing with bitcoin exchanges. If there were a wild price swing in bitcoin and a smaller brokerage failed to meet its margin call, the clearing house would have to take over the position, further moving the price of bitcoin, which could cause other brokers to fail, Peterffy said.“If that happens at a time when bitcoin spikes up for whatever crazy reason, there could be an avalanche,” he said.Questions like these have kept some futures market operators on the sidelines, for now. Intercontinental Exchange Inc, owner of the New York Stock Exchange and ICE Futures US, opted not to join CME and Cboe in the race to be first with a bitcoin future.“We didn’t think it was obvious to rush out a product and be first and settle against an index on a lot of exchanges that are not particularly transparent,” ICE chief executive Jeffrey Sprecher said this week at a Goldman Sachs conference.

Source: The Star December 07, 2017 07:18 UTC