Wall Street Giant JPMorgan Prepares for Bitcoin & Crypto Clearinghouse Options

By Bhushan Akolkar
Published March 16, 2021 Updated March 16, 2021
Best Buy In

Exchanges

Sportsbook

Wallet

Wall Street Giant JPMorgan Prepares for Bitcoin & Crypto Clearinghouse Options

By Bhushan Akolkar
Published March 16, 2021 Updated March 16, 2021

The explosive growth of Bitcoin and the overall crypto market has swayed some of the biggest Wall Street banking giants in recent times. As per the latest report by Forbes, Wall Street banking giant JPMorgan is preparing for Bitcoin (BTC) and crypto clearinghouse options.

advertisement

While the crypto market has registered unprecedented growth over the last decade, it still remains relatively immature. Before making any trades, traders still need to deposit funds with over-the-counter (OTC) trading desks and exchanges. This brings additional risks for the traders while the OTC desks are forced to look after the crypto custody.

The clearinghouse options will serve as a middleman between traders and OTC desks. These clearinghouses will ensure the enforcement of trade while creating liquidity in the market. Besides, if either party defaults, the house guarantees payments while ensuring that trading desks are able to handle the orders.

Speaking to Forbes, a JPMorgan senior executive said:

“We will fundamentally need a crypto clearinghouse to see that liquidity. Once that exists, banks will move their liquidity to it. Cryptocurrency brokers and exchanges need to avoid the kind of liquidity problems that trading app Robinhood ran into”.

Learning from Robinhood’s Recent GameStop Event

Last month, one of the most-popular stock trading platforms Robinhood was forced to stop trading during the GameStop mania at Wall Street. Robinhood had to face massive flak from retail investors over this matter. Things escalated to the levels that even the top regulators of America had to intervene.

With the crypto market getting mature every passing day, the crypto trading volumes have also spiked up. Also, with institutional products like Bitcoin futures, options and ETFs coming to the market, trading at OTC desks is likely to surge further from here.

While banks like Goldman Sachs and other have already started their crypto trading desks, a proper clearinghouse was still missing. Hopefully, JPMorgan can fill this void ahead!

advertisement
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan Akolkar
724 Articles
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

Loading Next Story