A few weeks ago Bitcoin Magazinereported that Tera Group, which operates the first regulated U.S. Bitcoin derivatives exchange, will take a controlling stake in public company MGT Capital Investment to create the first publicly traded U.S. Bitcoin derivatives exchange.
On Monday, Tera Group announced the appointment of former New York Stock Exchange (NYSE) CEO Duncan Niederauer as an advisory director. Before joining NYSE in 2007, Niederauer was managing director and co-head of the Equities Division Execution Services franchise at Goldman Sachs.
“This is an excellent opportunity to contribute to the growing Tera footprint. They are a young derivatives exchange with a great management team and a strong product and sales pipeline,” said Niederauer. “I have already begun advising them on how to approach and capture the opportunities that are emerging in the rapidly evolving global financial landscape for traditional and emerging financial products, such as bitcoin.”
“We’re delighted that Duncan has chosen to join Tera at this exciting time for our business,” said Christian Martin, chairman and CEO of Tera. “Our firm operates with the same client-first approach Duncan has shown throughout his impressive career. By providing the management team and clients with his unique global perspective, he will greatly add to the knowledge and experience of our firm.”
Bitcoin derivatives such as Tera’s forwards are the simplest way to expose investors to Bitcoin, especially those investors who prefer not to trade the digital currency itself – and are the easiest way to profit from the ups and downs of the bitcoin-dollar exchange rate. That’s why the Bitcoin derivatives market is exploding worldwide.
In the United Kingdom, former Goldman Sachs Executive Director Timo Schlaefer recently announced the launch of Bitcoin derivatives broker Crypto Facilities, which confirms the growing interest of institutional investors in the Bitcoin economy.
NYSE itself is warming up to Bitcoin: In January, in a joint investment with the participation of a subsidiary of USAA and BBVA Ventures, NYSE invested $75 million in the Bitcoin service provider Coinbase, bringing its total capital to $106 million.
Nasdaq, the second U.S. stock exchange, announced that Noble Markets will implement Nasdaq’s X-stream trading technology for the company’s soon to be launched digital currency marketplace.
“As one of the world’s leading providers of technology to the capital markets, Nasdaq is dedicated to discovering and supporting new and emerging technologies and marketplaces,” said Nasdaq Executive VP Lars Ottersgård. “We are thrilled to work with the experienced industry veterans at Noble Markets and look forward to supporting their cutting-edge, new endeavor for the long-term in addressing the needs of the digital currency space.”
“Noble was founded on the principal of bringing credible market structure and institutional trading expertise to the cryptocurrency marketplace,” added John Betts, founder and CEO of Noble Markets. “We are excited that Nasdaq shares our vision and commitment to support the development of this ground-breaking market.”
Before founding Noble Markets, which is backed by venture-capital firms Blockchain Capital of San Francisco and Tally Capital of Chicago, Betts led the development of electronic trading platforms at Goldman Sachs, Morgan Stanley and UBS.
The Wall Street Journalnotes that the agreement follows other Wall Street initiatives, such as the appointment of Niederauer at NYSE, which could pave the way for financial institutions to own and trade digital currencies.
New sophisticated trading infrastructures could instill more confidence in Bitcoin, despite the negative headlines focused on illicit activities, scams and extreme volatility, and attract hedge funds and other institutional investors that could bring stability to the cryptocurrency.
Major financial players are warming to the idea that the technology behind Bitcoin, if not the currency itself, could slash costs from the global financial system.