TradeStation Lays Out Its Cryptocurrency Trading Vision
TradeStation, the online brokerage that will offer bitcoin futures from CME Group (CME) and Cboe World Markets, is mulling ways to provide customers direct access to cryptocurrencies themselves. In an interview this week, TradeStation President John Bartleman said that the brokerage is looking at additional ways for clients to trade the likes of bitcoin either via a partnership with existing exchanges or by becoming an exchange itself. The online brokerage has already said that it will be ready on day one to offer the bitcoin futures and that it is seeing demand from customers.
James Putra, director of innovation and strategy at TradeStation, said earlier in the week that CME bitcoin futures will help drive "much more" capital into the cryptocurrency markets as well as boost awareness. Late last week, the CME and Cboe Global Markets got the green light from the Commodity Futures Trading Commission to list their futures with the CME. The futures are set to be launched on Dec. 10 by the Cboe and Dec. 18 by CME.
Cryptocurrency, particularly bitcoin, has been all the rage this year, as the price has skyrocketed to nearly $17,000 after starting the year around $1,000. While the digital currency has a lot of supporters, including the futures exchanges and some countries including Japan and South Korea, it is facing a lot of backlash from executives at some of the leading financial services companies in the U.S., who warn that it is a bubble and an unregulated market that could lose investors all their money. JPMorgan Chase & Co. (JPM) Chief Executive Jamie Dimon famously called bitcoin a "fraud," warning that he would fire any employees who traded in it. Since his comments, CME and Cboe announced their futures, and the value of bitcoin has surged.
While TradeStation's Bartleman acknowledged that there are risks to the system as cryptocurrency evolves very quickly, he also thinks that it is here to stay, likening it to the early days of the internet boom of the late 1980s and early 1990s. "There's real value here," said Bartleman. "In the next five years, I think we'll find ourselves in a place where retail customers will be trading in different types of crypto companies."
TradeStation's stance on cryptocurrency differs from Fidelity Investments and Charles Schwab, two online brokerages that won't offer the bitcoin futures. Charles Schwab told Investopedia that it is taking a wait-and-see approach, with spokeswoman Kaitlyn Downing saying, "We intend to study the new proposed bitcoin futures contracts and weigh their associated risks with an eye to protecting our clients' interests before we make these products available." Fidelity told Bloomberg that it has no plans to offer bitcoin futures to its brokerage customers.