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Most of the major players in the stock market have adopted a passive approach to bitcoin and other encrypted currencies. It could start to change.
Names familiar to the world of commerce, including retail brokerage
TD Ameritrade
Holding Corp. and high-speed trade giant
Virtu Financial
Inc.
VIRT 0.79%
support a stock exchange called ErisX, which plans to exchange cryptocurrencies and their derivatives, according to the two companies. ErisX is expected to announce its new business plan on Wednesday.
In addition, another derivatives exchange, TrueEX LLC, is expected to announce Wednesday the details of its project to launch a bitcoin exchange.
Until now, Crypto has struggled to attract traditional investors and reverse financial companies. Large and well-established exchanges have already tried to bring bitcoin to Wall Street with mixed results. Crypto markets are unstable and some regulators are afraid to be vulnerable to manipulation.
ErisX hopes to bring digital currencies closer to traditional asset classes by engaging brokers, including millions of small retail investors.
"We wanted to find something that brings customers the cryptocurrency they can see on a real stock exchange, with which they feel comfortable in a regulated space," said JB Mackenzie, head of futures trading. and foreign exchange transactions at TD Ameritrade. 11 million retail accounts funded.
CME Group
Inc.
first global trading group and its smallest rival
Cboe Global Markets
Inc.
both introduced bitcoin futures in December. These contracts allow operators to bet on the rise or fall in the price of bitcoin, without having to keep the digital currency.
Next year, ErisX aims to launch direct or "spot" trading of digital coins, as well as futures contracts allowing investors to receive coins at a later date – a contrast to the bitcoin futures contracts of CME and Cboe that allow to pay in cash according to a calculation of the price of bitcoin. ErisX expects to require the operations to be fully funded, which will limit the ability of investors to place risky bets in an already volatile market.
"The traditional aspects of our market will create an environment open to a wide range of traders and middlemen," said Thomas Chippas, head of electronic trading on Wall Street, who is managing director of ErisX.
ErisX is a restart of a traditional futures market, Eris Exchange, which was launched in 2010 to negotiate interest rate contracts, but failed to gain ground.
TrueEX representatives said the stock market was filing its bitcoin exchange plan with the Commodity Futures Trading Commission this week. Trading, like futures, allows traders to bet on the future rise or fall in the price of an asset. TrueEX, headquartered in New York, whose main business is interest rate swaps, modeled its exchange of bitcoins on contracts widely used in foreign exchange markets.
Write to Telis demos at [email protected] and Alexander Osipovich at [email protected]
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