JPMorgan Considers the Possibility of Allowing Clients to Trade Bitcoin Futures
As per the latest report published by the Wall Street Journal, JPMorgan is considering options to allow its users to trade Bitcoin Futures. If these report turns out to be true, it going to cause a lot of fireworks in the Bitcoin community, especially when the banks chief executive - Jamie Dimon - has been an open and harsh critic of the cryptocurrency. While citing a person familiar with these proceedings, the report stated "J.P. Morgan is considering whether to provide its clients access to CME's new bitcoin product through its futures-brokerage unit.”
Two month back in September, JPMorgan boss called Bitcoin as a “fraud” and said that its being used for several criminal activities like money laundering across the globe. Bitcoin has turned out to be one of the hot investing instruments for investors in the financial markets. The cryptocurrency has witnessed over a whopping 700% increase in its price in the last one year. However, Jamie Dimon called this a ‘Bubble” that could burst at any point in time. Jamie’s criticism about Bitcoin was so sharp that he even said that if any of the bank’s employees buy or sell Bitcoins, he would “fire them in a second.”
Now it seems that all these comments are however not stopping the bank to pursue the business opportunity that the bitcoin-futures market can offer. The unknown identity who is said to be having the right knowledge of the situation has said that JPMorgan is currently weighing option regarding the increasing client demand the associated risks for such bitcoin-futures contract. Currently, the bank is allowing its clients to trade in bitcoins through exchange-traded notes. This means the access to the Bitcoins will be given by routing their orders to exchanges.
Recently, world’s largest derivatives marketplace - CME Group - has officially announced last month that it will soon be starting Bitcoin Futures contract by the end of this year. This announcement has contributed majorly to a huge Bitcoin rally seen earlier this month taking its price from $5000 to $8000, a whopping over 40% jump in its prices. CME Group will be offering a cash-settled futures contract allowing traders to participate in Bitcoin trading without actually owning them.
Citing the person familiar with this situation, WSJ reported: "JP Morgan is considering whether to provide its clients access to CME's new bitcoin product through its futures-brokerage unit.”
The Bitcoin-futures contract is expected to bring a lot of cash flow and liquidity in the Bitcoin market and is also expected to reduce the huge volatility in Bitcoin prices, as witnessed currently. CME Group aims to bring stability in the Bitcoin prices and in its recently released specifications for the futures contract it will put a cap at a maximum of 20% swings on either side.
Another popular futures exchange, CBOE group is also to start trading bitcoin-futures contract early next year in 2018. With major financial institutions showing interest in Bitcoins, it seems the cryptocurrency is here to stay in future!