Thursday, 7 December 2017

A big Negative for Bit Coin - Wall Street banks push back on launch of bitcoin futures Letter to US regulators says financial system ill-prepared for cryptocurrencies

Bali News Views Editor's Comments: Warning one of the biggest selling points on Bitcoin recently has been that they expected Wall Street to market as legitimate investment.

According to this article it looks like Wall Street is reconsidering.

Frankly, I didn't know what they were thinking in the first place. Why would they want to launch a new investment that is up something like a thousand percent this year and recent moves like this week

Bitcoin tops $17,000 on one exchange, surging more than $5,000 in less than two days


Surely they would want to get involved after dropped 40% to 60%.

That is, of course, given the is a viable investment that not driven by a bunch of idiots or first-time investors.

Why is season maturer investors. Our primary not investing, but coin at this point, not because it's not maybe not in a good investment, but because it's been fueled by a bunch of ignorant first-time investors following Facebook advertisements and buying solely on the basis of crowd buying.

Throughout history, there is been examples of this type of buying into the Tulip crisis in the late 1800s when people could buy a business with the Tulip just because everybody was making money on.

Our recent I person was involved in the precious metals, pool men crash in the late 70s when I was young and naïve didn't realize investments would continue to what plagues silver from $5-$15 to $30 and Ashley to $50 when it was manipulated by the Hunt brothers.

I have wiser my older. It needs when I warn people of getting out of real estate in America in 2007 after I realized that women were having house selling parties instead of Tupperware parties and everybody including all the naïve first time this is where investing in homes and flipping them to make money
we also saw the same type scenario with the.com crisis that had the same type of increases and then a massive selloff and decrease.

It's not a matter of if this bit coin and crypto currency fad crashes the matter of when. And after his fallen 40 to 60% and stay down for months to watch the charts and watched the fundamental supply and demand see if professional investors are getting into it before I ever touch it.

Up for debate 4000% on real estate year the last 15 years. Yes, the long hard way, but thousand percent will "wealthy man.

Yes I missed out on Bitcoin but at least I can sleep at night.

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Wall Street banks push back on launch of bitcoin futures Letter to US regulators says financial system ill-prepared for cryptocurrencies Read next Chaotic trading marks new surge in bitcoin price.

 The Chicago Mercantile Exchange plans to start listing bitcoin futures with a centralised clearing mechanism © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Save to myFT Philip Stafford in London YESTERDAY 102 

The world’s largest banks are pushing back on the introduction of bitcoin futures, raising concerns with US regulators that the financial system is ill-prepared for the launch of the contracts as the value of the volatile cryptocurrency has soared. 

 The price of bitcoin has risen to a new high of more than $15,000 on several exchanges. Institutional investors have been keen to trade the asset but only via a regulated market. 

 However, the planned launch in the next 10 days of futures contracts by the Chicago exchanges CME Group and CBOE Global Markets, given a green light from the Commodity Futures Trading Commission last week, has prompted a backlash among the major brokers who backstop trading across the industry. 

 According to a letter from the Futures Industry Association, the main futures industry lobby group whose members include all the largest Wall Street banks, to the CFTC, the rapid introduction of bitcoin futures “did not allow for proper public transparency and input”. 

 The lobby group represents some of the world’s largest brokers, including Goldman Sachs, Morgan Stanley, JPMorgan and Citigroup. The CME and CBOE agreed to operate under a self-certified regime for their upcoming contracts, meaning regulators had minimal time to review them formally. The letter, sent to the CFTC on Thursday, insists that using a self-certification scheme for “these novel products does not align with the potential risks that underlie their trading and should be reviewed”. 

 The CFTC warned last week during its approval process that the emerging cryptocurrency markets were largely unregulated and the agency had “limited statutory authority”. “It is also our understanding that not all risk committees of the relevant exchanges were consulted before the certification to launch these products,” the letter added. Futures brokers are worried they will bear the brunt of the risk associated with bitcoin futures, because the margin that backstops the contract is placed in a clearing house. 

 Clearing houses stand between two parties in a trade, managing the risk to the rest of the market if one side should default. They are mutually funded in part by banks to guard against the failure of their largest members. Several brokers among the top 10 largest providers have privately confirmed to the Financial Times that they will not clear the products immediately. ABN Amro told clients it would clear bitcoin futures but only if they submitted requests in writing, and said it would assess the customer’s trading systems and track record in meeting risk limits. “Other factors may be considered [by ABN] in its sole and absolute discretion,” it said in a notice. CBOE said its futures exchange did not have a risk committee, but it consulted with its board and regulatory oversight committee. 

The OCC, its clearing house, also has a risk committee that reviewed the product. In its filing, CME said it had discussed the specifications of the contracts with customers for around six months. It did not have an immediate comment on Wednesday. The backstory San Francisco reporter Chloe Cornish selects the stories that explain the concerns behind cryptocurrencies like bitcoin

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