Categories: Bitcoin

Bitcoin Futures Could Spur Bank Ratings Downgrades


Get unique fiat and cryptocurrency evaluation on CME Group operates the biggest regulated bitcoin futures market within the US. Many imagine it’ll finally launch an ethereum futures product.

This hostile view towards bitcoin futures will not be remoted to Fitch. Ana Arsov, managing director at Moody’s, mentioned that it’s going to contemplate a bitcoin futures clearing operation a “credit negative” when deciding on a financial institution’s ranking, although this threat will not be at the moment massive sufficient to have a fabric influence.

“If a bank were to establish a very large business clearing cryptocurrencies, that would be credit negative. As with any asset class, if there is a new concentration of risk that we think is inappropriate, that can create downward ratings pressure. However, we don’t see that risk as imminent.”

Thierry Grunspan, director of worldwide monetary establishments scores at Standard & Poor’s, concurred with these assessments, although he burdened that the danger was “very remote for now.”

“For the clearing members that do trade cryptocurrencies, there is clearly a direct effect,” he mentioned. “If volumes explode, it means some of their hedge fund clients are trading heavily, so it is putting some extra risk on their shoulders. The link is direct.”

But although distant for now, these dangers may turn out to be extra pertinent as extra corporations launch cryptocurrency derivatives merchandise.

CBOE has not been shy about its need to create extra cryptocurrency merchandise, and CME has taken what many imagine are the primary steps towards launching an ethereum futures market. The Nasdaq, in the meantime, is reportedly growing its personal bitcoin futures product and has expressed openness to launching a cryptocurrency alternate.

Moreover, quite a few fund suppliers hope to quickly have the ability to listing the primary bitcoin ETF, a growth that would offer a better variety of retail patrons with publicity to bitcoin futures.

Images from Shutterstock

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