Bitcoin futures are set to begin trading Sunday at the CBOE and a week later at the CME, and retail brokerages are bracing.
Interactive Brokers' founder Tom Peterffy said on CNBC's "Fast Money" on Thursday, his concern is that the cryptocurrency could continue to rise to $100,000 or more before crashing to zero, and could pull down small brokerages in the process.
Bitcoin's price has skyrocketed just this week from $12,000 to $19,000 and back down below $16,000. Futures trading is only seen as further legitimizing bitcoin even as some prominent market participants say a dangerous bubble is forming.
"Smaller brokerage firms will go bankrupt," Peterffy warned on Thursday, adding it could "destabilize the clearing houses."
Peterffy has sounded alarms before about the dangers of bitcoin, but his firm is allowing traders access to the futures products as of Monday, at a 50 percent margin requirement. Traders will be able to take long positions only, at $5 a contract, and won't be able to take a short position, or a bet on a decline. The steep price per contract ânormally the broker charges 25 cents to 80 cents a contract â is to pay Interactive for the risk, Peterffy said.
"I'm extremely curious, this is an amazing thing," Peterffy told CNBC, adding that he doesn't own any bitcoin. "How silly people are, it is just amazing."
Firms involved in the futures industry have said they are concerned about the swift roll out of the bitcoin futures product. The Futures Industry Association sent a letter to the Commodity Futures Trading Commission on Wednesday raising concerns about the volatility of digital currencies and the risks clearing firms will be shouldering once futures trading begins.
Alabama Securities Watchdog Hits 3 ICOs with Cease-and-Desists
The Alabama Securities Commission (ASC), the U.S. state's securities regulator, has joined its counterparts in Texas and New Jersey in hitting out at initial coin offerings (ICOs) that are soliciting
Bitcoin Faces First Close Below This Key Long-Term Support in 2.5 Years
Bitcoin risks closing below the 50-week moving average (MA) – an important long-term support not breached for over 2.5 years.
With the bears already on the offensive following the recent sell-off,
China MIIT’s Yu Jianing: Neither Blockchain Nor Bitcoin is A Bubble
May 23, Yu Jianing, the director of industrial economic institute of the information center of Ministry of Industry and Information Technology (MIIT), indicated that “neither blockchain nor bitcoin
Norfolk Southern the Latest Railway to Join Blockchain Transport Group
U.S. railway network Norfolk Southern has become the latest industry player to join the Blockchain in Transport Alliance.
One of less than a dozen Class I railroads in North America, Norfolk Southe
EY's Maritime Blockchain Insurance Tech Is Now Live
A group of companies piloting a blockchain-based insurance platform for the global shipping industry announced on Friday that the technology is now live in commercial use.
Dubbed Insurwave, the blo
ShipChain Pushes Back Against Securities Violations Claims
Supply chain startup ShipChain claims it was unaware its SHIP tokens were available to South Carolina residents in its first public response to the state's cease-and-desist order.
The blockchain co
Most Big Cryptos Dropped this Week – These Two Bucked the Trend
The cryptocurrency markets are set to end the second week of May on a low note.
The total market capitalization for all cryptocurrencies fell below $400 billion for the first time since April 26 on
Bitcoin tracking for slight weekly losses despite news of regulatory crackdowns
Bitcoin has held up relatively well this week despite negative headlines about regulatory crackdowns. For analysts with a long-term view, that price action fits with their thesis that increased