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TD Ameritrade has decided to team up with cryptocurrency exchange ErisX to offer spot and futures trading for popular cryptocurrencies.
JB Mackenzie, managing director of futures and foreign exchange at TD Ameritrade, said that the stock brokerage giant was offering this service because their customers “wanted access to trade digital currency products.” Speaking to CNBC, Mackenzie said that the choice of ErisX was guided by the need to find a platform that was fully regulated and had a “capital markets feel.”
The market cap of cryptocurrencies has taken a beating in this year with major cryptocurrencies losing almost 50% of their valuation. However, according to Mackenzie, customers are looking to add this volatile asset in their portfolios.
The cryptocurrency exchange, also backed by high-speed trading company Virtu, is regulated by the Commodity Futures Trading Commission. According to the deal, ErisX will offer customers of TD Ameritrade access to futures as well as physical bitcoin products. While Coinbase, an $8 billion company, only provides spot trading of bitcoin, ErisX, a relatively new market entrant, supports trading, deposits, and withdrawals of bitcoin, bitcoin cash, Ethereum, and Litecoin.
TD Ameritrade, with more than 11 million retail accounts and $1.2 trillion in assets, was the first financial services firm to offer bitcoin futures contracts to approved clients signaling the bulls.