Street View: US exchanges can weather potential risk from perpetual futures
BUZZ-Street View: US exchanges can weather potential risk from perpetual futures ** The Commodity Futures Trading Commission on Friday paved the way for perpetual crypto futures, sparking concerns that U.S. exchanges could be hurt if such vehicles get extended across asset classes
** U.S. exchange operators Cboe Global Markets CBOE.Z and CME Group CME.O closed down 9.8% and 5.8% on Monday, respectively, while Intercontinental Exchange ICE.N slipped 2%
COMPETITIVE RISK MANAGEABLE
** Raymond James says investors in U.S. exchanges are nervous that products with significant retail participation are at risk of losing market share to new competitors with perpetual futures contracts
** Says perpetual futures aren't a viable alternative to futures contracts geared towards institutions and CFTC’s order could become the subject of litigation
** RBC Capital Markets says perpetual futures have attracted limited institutional demand and competitive risk is manageable given fundamental product differences and structural advantages for Cboe and CME
** TD Cowen says approval likely creates more competition in the retail market and could curtail valuation multiples for U.S. exchanges
** Barclays says even if perpetual futures come to equity products, index perpetual futures wouldn't likely have a meaningful impact
(Reporting by Arasu Kannagi Basil in Bengaluru)
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