The TRADE 56 - Page 98

[ F I N A L T H O U G H T S | H AY L E Y M C D O W E L L ] Hayley’s Comment Crypto craze Hayley McDowell offers her take on the cryptocurrency craze and a new, dedicated website in this space from The TRADE. T hese days, everybody is talking about crypto, from the latest price swings and scandals to any sniff of potential regulatory inter- vention. News of Cboe and CME Group launching Bitcoin futures late last year arguably marked the beginning of this shift, alongside the US fi- nancial watchdog’s decision to shut down the possibility of a Bitcoin exchange-traded fund (ETF) launch due to regulatory, valuation and liquidity fears. Those fears remain the same today. For institutional investors looking to enter the crypto space, a regulatory endorsement could prove to be a game-changer. A lead- ing exchange operator’s markets division head told delegates at a recent conference despite regula- tors halting any progress to launch Bitcoin ETFs, Bitcoin futures will help put some kind of regulatory 98 // TheTrade // Summer 2018 framework in place for cryptos on listed exchanges. In other words, Bitcoin futures could lay the groundwork for an even greater crypto ecosystem in the near future. Certainly we can expect more major banking players to launch their own crypto futures product, whether that be for Bitcoin or other digital assets like Litecoin or Ethereum, but a shift towards institutional trading of cryptocur- rencies requires far more work. Bitcoin futures may go some way to breaking down any resistance but ultimately regulatory oversight of cryptocurrency trading is arguably the greatest barrier for institu- tional investors. Cryptocurrencies are global in nature, but financial regulation is far more regional and fragmented. It’s hard to imagine regulatory consistency and con- vergence on the same scale as the global crypto market, but unlocking that potential cross-border business on the institutional side of the industry could catapult crypto to new heights. I must confess the growth of the crypto universe has indeed captured my attention over the past year, along with so many others, and (luckily for me) there have been some interesting developments around crypto at The TRADE. This includes the exciting launch of our new website, The TRADE Crypto, which will bring the buy- side community news about the growth, progress and future of global institutional cryptocurrency trading. It seems quite far-fetched at this point in time to imagine traditional asset managers dipping their toes into Bitcoin, but with the pace the crypto industry has been moving at over the past year or two, I certainly wouldn’t rule anything out.