CME Clearing Member To Regulator: Bitcoin Futures ‘Impossible’
Interactive Brokers Group has appealed to regulators to reconsider Bitcoin futures trading, calling it “impossible.”
A clearing member of CME Group, the Bitcoin futures pioneer, has written to regulators expressing its “deep concern” ahead of next month’s launch.
In a letter reproduced online, Interactive Brokers Group Chairman Thomas Peterffy said that Bitcoin and cryptocurrencies have “no fundamental basis.”
“As a CME clearing member, we are deeply concerned with proposals that would allow Bitcoin and other cryptocurrency derivatives to be cleared in the same clearing organization as other products,” he wrote.
“There is no fundamental basis for valuation of Bitcoin or other cryptocurrencies and they may assume any price from one day to the next.”
CME’s decision to open up Bitcoin futures trading met with great applause last month, with Chairman Emeritus Leo Melamed telling the media he planned to “make Bitcoin not wild, nor wilder” through regulated access.
Peterffy, however, is adamant that the concept cannot work.
“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,” he continued.
The letter from Nov. 14 will now go before the chairman of the Commodity Futures Trading Commission in Washington.
Bitcoin had reacted extremely positively to CME meanwhile, with commentators heralding the start of a Wall Street investor influx which could take the virtual currency considerably higher in price short-term.
- Chairman’s letter