TD Ameritrade may be taking a wait-and-see approach when it comes to offering bitcoin futures and cryptocurrency trading, but if it does, it could be a boon to the firm's trading volumes. That's according to Trefis.com, a platform created by a team of MIT engineers and Wall Street analysts that helps investors understand how companies' products affect share prices. In a post on Forbes.com, the Trefis team predicted that the Omaha, Nebraska-based discount brokerage could see "substantial" gains in trading volumes if it did offer bitcoin futures.
"Introducing bitcoin futures on well-established brokerages exposes the currency to a large pool of traders and investors, which could drive further demand for the currency and volumes for the brokerages," wrote Trefis.com. "Further, with futures, traders would only need to maintain a margin and buy and sell contracts, rather than taking ownership, which could open up further avenues for growth. Overall, bitcoin futures should help Ameritrade gain substantial volumes; since the beginning of 2017, around 14.9 million bitcoins were traded monthly." On top of increasing trading volume by offering bitcoin futures, Trefis predicted that TD Ameritrade Holding Corporation (AMTD) could see an uptick in the number of customers.
Bitcoin has been surging all year, with investor attention on cryptocurrency reaching frenzy levels. The digital currency, which is unregulated, started trading at around $1,000 at the start of this year and was recently trading at around $16,700. The Cboe World Markets and the CME have launched or will be launching bitcoin futures, which a handful of online brokerages are now offering to their customers. TradeStation and Ally Invest are two of the high-profile firms that are planning to offer bitcoin futures, while TD Ameritrade and Charles Schwab are taking a wait-and-see approach. Fidelity Investments has said in the past that it has no plan to offer bitcoin futures to its brokerage customers.
In an interview with Business Insider, JB Mackenzie, managing director at TD Ameritrade, said that the online brokerage is watching the launch and that, while it is taking a wait-and-see approach, the firm is ready to begin offering the futures products if it deems that the market conditions are right. "With every new futures product, we want to see how the marketplace comes together," Mackenzie said in the interview. "We want to make sure there are enough market makers, liquidity and volume."