Bitcoin futures have long been the subject of intense scrutiny in the US, with the SEC to date having repeatedly turned down applications to allow these sorts of tradable instruments to be listed legally in the country.
The problem, as is repeatedly reported, is that the underlying asset (the bitcoin, in this instance) is far too volatile and unregulated to make any such futures derivative a safe and reliable investment asset for the everyday retail investor in the US.
How long this view will remain is unclear – every day, bitcoin becomes an increasingly credible asset and this suggests we won’t have to wait too long.
And the latest news is that yet another entity is going after the prize.
As per reports that hit press on Tuesday, Man Group of the UK has decided to launch its own futures contracts in Europe. The development comes just a matter of weeks before CME is expected to do the same – seemingly implying a much more favorable regulatory environment in Europe than is the case in the US right now.
Here’s what the CEO of Man Group, Luke Ellis, had to say about the development when questioned by Reuters:
“Conceptually digital currencies are an interesting thing. It’s not part of our investment universe today – it could be. If there is a CME future on bitcoin, it would be.”
For those not familiar with Man Group, the publicly traded entity is an active management business initially founded as a sugar cooperage and brokerage by James Man in 1783. It currently trades on the London Stock Exchange under the ticker EMG for a market capitalization of a little over $3.09 billion as of the most recent close (November 15, 2017). It’s the third largest hedge fund in the world as measured by assets under management and it generates around $827 million in annual revenues (true as of the end of 2016).
While this is just one hedge fund, that a company of Man’s size is taking bitcoin into its own hands and creating a futures instrument based on the cryptocurrency is a strong indicator of increased mainstream adoption in the space.
Let’s see how it all plays out.
Image courtesy of Andreas Poike via Flickr