NYSE’s Parent Company Is Building a Cryptocurrency Exchange

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The parent company of the New York Stock Exchange may be the first major stock exchange to build a platform allowing institutional investors to buy and hold Bitcoin.

The report, which was first released by The New York Times, states that Intercontinental Exchange, the parent company of the NYSE, will soon offer traders a swap contract that would allow investors to receive Bitcoin the following day.  The exchange would back and approve all transactions, making it easier and less risky for institutional investors to make purchases of the cryptocurrency.  Trading swap contracts poses an advantage over traditional OTC purchases as the trading is under the oversight and regulation of the Commodities Futures Trading Commission.

The news of this signals that there is a greater acceptance of Bitcoin and cryptocurrencies on Wall Street, as well as a large interest in Bitcoin from institutional investors.  Earlier this month, Goldman Sachs confirmed rumors that they would be opening a cryptocurrency trading desk, although the details of the operation are still being worked out.  

In recent weeks, Nasdaq’s CEO said that the company would consider listing cryptocurrencies on its website at some point in the future once the regulatory landscape becomes clearer, but the NYSE beat them to the punch.

The CEO of LedgerX, Paul Chou, recently said in an interview with The New York Times that the cryptocurrency industry is seeing unprecedented institutional interest.  Chou understands the big finance landscape as he worked at Goldman Sachs as an executive for part of his career.  

“The industry is seeing unprecedented institutional interest for the first time in Bitcoin’s history. I’ve been amazed that the strongest believers in cryptocurrency often start out the most skeptical. It’s a healthy skepticism. But at some point, the perception shifts, and for many institutions — I think we’re finally there.”

It is clear that the cryptocurrency investment space is changing at a rapid pace.  One common theme surrounding institutional investors is that they would prefer to invest with a clear regulatory framework, so as regulations develop more institutional wealth should flow into the markets.