News ICE Seeks CFTC Approval for Physical Bitcoin Futures

ICE Seeks CFTC Approval for Physical Bitcoin Futures


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The Intercontinental Exchange appears to be on a quest to make Bitcoin investing easier. The company is said to be in advanced discussions with the US CFTC regarding the launch of physically settled Bitcoin futures.

Cybersecurity is proving to be the main topic of deliberations with the US securities regulator. According to a report by the WSJ, the effort is backed by firms like Microsoft and Starbucks. The legitimization of digital currencies as an asset class is long-awaited by tech companies.

Earlier this week, Facebook was unveiled to be considering the introduction of a payment system using a stable coin into WhatsApp.

Rumors about a cash-settled bitcoin futures contract are circulating since early autumn. In the last days of November, the ICE announced a prospective date for the launch which is set to the 24th of January. The plan is still subject to regulatory approval.

Institutional Investors

Physical settlement of bitcoin futures is central to the asset gaining trust with institutional investors. The massive flow of money into the cryptocurrency space in 2017 culminated with the launch of US dollar-settled futures contracts.

Around a year ago, the launch of the contracts on part of the CBOE and CME led to a bear market that shaved off over 82 percent of the value of the leading cryptocurrency. Adoption hinges on more regulation and changes to the definitions of securities.

A bipartisan bill that seeks the exclusion of cryptocurrencies from the standard securities laws seeks to amend the Securities Act from 1933. The SEC is currently excluding bitcoin and Ethereum from securities laws, but other tokens are defined as such.

Market Manipulation Concerns

The concerns about market manipulation on part of larger investors into bitcoin were identified as the main reasons for the bear market in 2018. In the runup to the launch of the cash-settled futures contracts large accounts accumulated significant amounts of cryptocurrencies.

Recent weeks saw many of those accounts liquidate their holdings with the current stabilization in prices tied to the potential reinvestment of their proceeds at a lower price.

As of writing bitcoin is trading just above $4,000 after marking a low around $3130 around the anniversary of the launch of the CME’s cash-settled bitcoin futures contract.



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