Thomson Reuters
- JPMorgan is considering whether or not to help clients tap into a potential market for bitcoin futures, according to The Wall Street Journal.
- CEO Jamie Dimon has derided the digital currency as a “fraud” and said he’d fire employees for trading bitcoin.
JPMorgan CEO Jamie Dimon’s opposition to bitcoin, the red-hot cryptocurrency up more than 700% this year, is no secret.
The billionaire has derided the cryptocurrency as a “fraud,” useful only for criminals and murderers. He also said he would fire employees of the bank trading bitcoin for being stupid.
Dimon has since pledged that he will keep quiet about the cryptocurrency.
Still, the US bank is considering whether it will help its clients tap into a potential bitcoin futures market being prepared by the exchange giant Chicago Mercantile Exchange, according to a report by The Wall Street Journal.
“JPMorgan is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit,” The Journal’s Alexander Osipovich reported, citing one person familiar with the matter.
The company, according to The Journal, is “assessing whether there is demand among JPMorgan’s customers for the proposed CME bitcoin contract.”
CME is set to launch a market for bitcoin futures by the end of this year, which would allow investors to bet on the future price of the whipsawing digital currency. Cboe, another exchange, is also preparing a bitcoin futures market.
Bank of America Merrill Lynch noted recently that bitcoin futures could help dampen the coin’s volatility. Here’s the bank:
“We would not overstate this, as a material reduction in volatility would require there to be a large community of speculators prepared to provide liquidity to the natural owners of the various coins, but given the volatility of the coin markets, maybe there already exists a cadre of participants who would look to short coins on strong days and vice versa, which could overall reduce volatility.”
Still, not everyone is convinced that bitcoin futures would be positive for the markets.
In the open letter addressed to J. Christopher Giancarlo, the chairman of the Commodity Futures Trading Commission, Thomas Peterffy, the chairman of Interactive Brokers, one of the largest derivatives traders and a provider of clearing services for hundreds of brokers, said such a product could ultimately “destabilize the real economy.”
JPMorgan did not immediately respond to a request for comment.
Read the full Journal report>>
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