Thomas Peterffy, Chairman of the Interactive Brokers Group, has expressed concern over CME’s plan to open Bitcoin futures trading, citing that cryptocurrencies have “no fundamental basis”.
Bitcoin soared to new heights last month following an announcement by the Chicago Mercantile Exchange (CME) Group that it planned to offer Bitcoin futures trading before the close of the year, and now a letter penned by Interactive Brokers Group Chairman Thomas Peterffy has revealed opposition to the move.
In a letter reproduced on Imgur, Petterfy – on behalf of the Interactive Brokers Group, which is a CME clearing member – expresses “concern with proposals that would allow Bitcoin and other cryptocurrency derivatives to be cleared in the same clearing organization as other products”.
In a letter that will ultimately appear before the chairman of the Commodity Futures Trading Commission, Peterffy writes:
“There is no fundamental basis for valuation of Bitcoin or other cryptocurrencies and they may assume any price from one day to the next. This has been illustrated quite clearly in 2017 as the price of Bitcoin has increased by nearly 1000%.
Cryptocurrencies do not have a mature, regulated and tested underlying market. The products and their markets have existed for fewer than 10 years and bear little if any relationship to any economic circumstance or reality in the real world.
Margining such a product in a reasonable manner is impossible. While the buyer (the long side) of a cryptocurrency futures contract or call option could be required to put up 100 percent of the value to ensure safety, determining the margin requirement for the seller (the short side) is impossible”.
The Commodity Futures Trading Commission will ultimately be able to issue a verdict on the debate; should the way be cleared, CME Group has announced its intent to launch Bitcoin futures trading in mid-December.
The announcement was first made on Bitcoin’s ninth birthday, where at the time the cryptocurrency’s price advanced 2.1% .
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