Wall Street Fears Bitcoin Futures Will "Destabilize the Real Economy"
Wall Street is not happy about a pending cryptocurrency futures market set to open before Christmas this year, and some of the biggest names in the sector are voicing their concerns, ramping up rhetoric by issuing grave warnings bitcoin and its kind are not welcome to their speculative party.
Also read: Man Group Hedge Fund May Be Next to Launch Bitcoin Futures
Wall Street Begs Regulator to Separate Cryptos
“This letter is to request the Commodity Futures Trading Commission [CFTC] require any clearing organization that wishes to clear any cryptocurrency or derivative do so in a separate clearing system isolated from other products,” wrote Interactive Brokers (IB) chairman Thomas Peterffy.
IB is among Wall Street’s derivatives and broker clearing service main providers. The letter was published 14 November 2017 as an advertisement in the legacy industry bible, Wall Street Journal.
Widely circulated reports have Chicago Merc launching bitcoin futures within weeks of this year’s end. The news was received with cautious optimism among bitcoiners, but, evidently not everyone in the traditional industry is looking forward to such a financial future.
The full-page-ad-open-letter pointed to CFTC Chairman J. Christopher Giancarlo, warning nothing less than the fate of capital markets is at stake. Mr. Peterffy urged isolating bitcoin futures rather than risk the possibility to “destabilize the real economy.”
CFTC oversees derivatives and futures, and is the natural regulator ultimately on the hook for crypto futures.
Cryptos Not Mature Enough
The letter continues, if CME “clears a cryptocurrency together with other products, then a large cryptocurrency price move that destabilizes members that clear cryptocurrencies will destabilize the clearing organization itself and its ability to satisfy its fundamental obligation to pay the winners and collect from the losers on the other products in the same clearing pool.”
“Cryptocurrencies do not have a mature, regulated and tested underlying market,” Mr. Peterffy continued his lambast. “The products and their markets have existed for fewer than 10 years and bear little if any relationship to any economic circumstance or reality in the world.”
Undoubtedly, here the derivatives mogul refers to the up and down, and quick up again, of bitcoin’s price. For many traditional financiers such volatility violates nearly all historical precedence, never mind the technology or other debates about cryptocurrencies.
This would be Mr. Peterffy’s second high profile ad campaign. Back in 2012, he privately weighed-in on the 2012 US presidential general election, spending millions on television ads. He then lamented what he saw as growing socialism, and, now somewhat ironically, said, “America’s wealth comes from the efforts of people striving for success. Take away their incentive with badmouthing success and you take away the wealth that helps us take care of the needy,” emphasis added.
What do you think of the letter to regulators? Is it a legitimate concern? Tell us in the comments below!
Images courtesy of: Pixabay, WordPress.
At Bitcoin.com there’s a bunch of free helpful services. For instance, check out our Tools page!