BTC Volatility Won't Hurt CME and CBOE, Moody's Says

Popular rating agency released new bitcoin-related report
15 February 2018   624

Moody's rating agency believes that the launch of futures for Bitcoin by the CME and CBOE is unlikely to affect their credit rating.

Moody's report was approximately two months after the launch of derivatives. In the 11-page document, the agency states that the measures taken by the two trading floors to minimize risks, combined with the early stage of market development, do not allow to consider these risks serious.

To date, the volume of trading in bitcoin futures is small, but CME and Cboe expect to play on the interest of the investment community to the underlying asset. The price of bitcoin is highly volatile, but we do not think that the risks of this market will affect the credit rating of CME and Cboe, given the small volume and strong risk management system used by central counterparties.

Moody's Report

The report provides an overview of the formation of the futures market, as well as the problems that, according to Moody's, restrain its development, including the volatility of the bitcoin price.

Moody's suggests that the requirements of CME and Cboe can be changed along with the growth of bitcoin volatility, while brokers, in particular TD Ameritrade and E * Trade, will have nothing else to do but follow the vector set by the trading floors.

SEC May Approve BTC ETF in 2019

This thought was told by Bill Barhydt, chief executive of bitcoin payment start-up Abra
05 September 2018   414

In an interview with CNBC, the head of Abra, Bill Barhydt, said that the SEC had not yet approved the bitcoin-ETF because the initiators of the launch of these funds "do not meet the expectations" of the agency.

I think the issue with the SEC, quite frankly, is that the people who are doing the applications don't fit mold of who the SEC is used to approving. I used to work for Goldman Sachs, but if you look at how I'm dressed you probably wouldn't know it. So I probably, unfortunately, couldn't go like I am here to a meeting at the SEC to say I'm applying for the ability to issue an ETF.

Bill Barhydt

CEO, Abra

According to Barhydt, the applicant must "look, smell and behave" as the SEC wants to approve the application. He also believes that the application for the launch of ETF from a reputable financial company will be approved rather than from a start-up.

He also expressed confidence that the first publicly cryptocurrency ETF will appear next year.

It's going to happen in the next year, I would actually make a bet on it. There is too much demand for it.

Bill Barhydt

CEO, Abra

In late August, the SEC rejected an application for the ProShares Bitcoin ETF and ProShares Short Bitcoin ETF. At the same time, a similar fate awaited several applications for the launch of Bitcoin-ETF from Direxion and GraniteShares.