New York Stock Exchange to Collaborate with CoinDesk for Potential Crypto Trading

Speaking at Consensus 2024 in Austin, the president of the New York Stock Exchange (NYSE), Lynn Martin, has said it’s possible the exchange could offer crypto trading services in the future pending regulatory clarity around digital assets.

Martin’s predecessor at the NYSE and the current CEO of crypto exchange Bullish, Tom Farley,  also weighed in, saying the rapid pace of adoption recently and the sudden shift in the politics around crypto makes it likely that we’ll see the kind of regulatory clarity Martin is hoping for in the next few years regardless of who wins this year’s presidential election.

Martin and Farley’s appearance at Consensus followed an earlier announcement of a collaboration between the NYSE and CoinDesk Indices, a subsidiary of the Bullish exchange. NYSE and CoinDesk Indices will launch cash-settled index options tracking the CoinDesk Bitcoin Price Index (XBX).

XBX tracks the spot price of bitcoin, denominated in U.S. dollars, in real time—24/7—across multiple crypto exchanges, with prices calculated and published once per second to provide a benchmark for ETF assets.

Upon regulatory approval, these options contracts will offer investors access to an important liquid and transparent risk-management tool.

Jon Herrick, Chief Product Officer, New York Stock Exchange.

Related: Bullish Exchange, Led by Ex-NYSE Chief Farley, Acquires CoinDesk 

Crypto Trading An Opportunity For NYSE

Speaking about the possibility of the NYSE offering crypto trading during a panel discussion on Wednesday, Martin said that “if there was clear regulatory guidance, it would be an opportunity to look at.” The NYSE president later added that the huge inflows to the Bitcoin ETFs are a “a strong sign” of demand for more regulated crypto trading:

The fact that you’ve seen $58 billion or so come to the ETFs has been a strong sign that the market is looking for regulation in traditional structures…So, hopefully, the [Securities and Exchange Commission] saw the inflows and said, ‘Hey, this makes a lot of sense,’ considering bitcoin ETFs have been a tremendous success.

Lynne Martin, NYSE President

One of NYSE’s main rival exchanges, the Chicago Mercantile Exchange (CME), already has plans to launch Bitcoin spot trading, according to a report published earlier this month in the Financial Times. 

The CME, which is a huge player in the regulated trading of cryptocurrency futures, is apparently holding discussions with traders interested in trading Bitcoin through a regulated exchange. Much of the interest apparently comes from traders looking to engage in ‘basis trading’ through CME — a strategy whereby traders borrow money to sell futures while also buying the underlying asset on spot markets, making profits by exploiting the small price difference between the two.

Political Shift Drives Rapid Change, Says Bullish CEO

Speaking on the same panel Bullish CEO, Tom Farley, highlighted the sudden shift in the political environment around crypto suggesting it has driven the approval of the Ethereum spot ETFs, the removal of the anti-crypto chair of the Federal Deposit Insurance Corporation (FDIC) and the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) through the House of Representatives.

Related: London Stock Exchange Lists Bitcoin and Ethereum ETPs, Begins Trading

Farley said this political change and rapid progress means we’ll likely see considerable clarification of crypto’s regulatory status in the US over the next few years regardless of who wins this year’s election:

Five years of evolution happened in five minutes, I’m really optimistic about what it means in this country…You’re gonna see progression in 2024 and 2025, irrespective of whether or not it’s Trump or Biden or Michelle Obama [in the Whitehouse].

Tom Farley, CEO of Bullish