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How The Proposed NASDAQ Bitcoin Futures Differ From the CBOE and CME Offerings?

Envisaged to be more of an investment than a tracker product

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NASDAQ to Launch its own Bitcoin Futures

American stock exchange NASDAQ (the National Association of Securities Dealers Automated Quotations) is anticipated to be the third to launch Bitcoin futures contracts. Over an interview, Adena Friedman, CEO NASDAQ, confirmed the company’s belief that digital currencies and cryptocurrencies will have a role in the global economy.

In 2017, we saw the CBOE (Chicago Board Options Exchange) and the CME (Chicago Mercantile Exchange) launch their variants of futures on the Bitcoin price on December 10th and December 17th, respectively. The markets expect NASDAQ to launch its own Bitcoin futures sometime during the second quarter of 2018.

Bitcoin Futures: How the NASDAQ Offering Would Differ From the Rest?

The NASDAQ offering is expected to differ from the CBOE and CME Bitcoin futures.

  1. The company is investigating the possibility of launching a total return future product instead of a tracking future product. In the words of Friedman, the product would be “more of an investment than a tracker.”
  2. Unlike the CBOE and the CME, NASDAQ is expected to base its price off 50 Bitcoin sources from around the world. The CBOE Bitcoin (USD) futures contracts that are based on the Gemini auction price for Bitcoin in U.S. dollars. CME Bitcoin futures are based on the CME CF Bitcoin Reference Rate (BRR), which aggregates Bitcoin trading activity across four major Bitcoin spot exchanges; Bitstamp, GDAX, itBit, and Kraken.

What Happens if There Is a Hard Fork?

A NASDAQ official has made known that in case of a hard fork in the cryptocurrency, both sides of the fork would go on to the index for one day, and after that, the value of the other fork would be reinvested in Bitcoin and the value of the index would be adjusted.

The company’s final decision to launch the product still remains dependent on:

(a) Sufficient client demand

(b) Getting the right risk management protocols in place.

Image Credit: Deposit Photos

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