Eyeing Digital Future: TD Ameritrade's Strategic Investment in Cryptocurrency Trading Exchange

On Oct. 3, 2018, TD Ameritrade announced a strategic investment in ErisX, a regulated derivatives exchange and clearing organization that will list cryptocurrency spot and futures contracts on a single platform.

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Key Takeaways

  • TD Ameritrade has made a strategic investment in cryptocurrency exchange ErisX
  • Cryptocurrency trading and blockchain technology align with our roots and leadership in fintech
  • Email crypto@tdameritrade.com for updates on cryptocurrency trading availability

As digital assets move from the niche to the mainstream, investors continue to seek ways to access the cryptocurrency market. ErisX, a derivatives exchange and clearing organization, has announced that they will provide investors access to trade cryptocurrency spot and futures contracts on one platform and TD Ameritrade has made a strategic investment to advance its innovation goals and develop crypto-currency products for investors. ErisX’s goal is to help make digital currency trading even more accessible.

The recent announcement is only the starting point, bringing together a group of market participants as it develops cryptocurrency trading products. Our goal is to develop products that fulfill the needs of our clients more broadly.

Currently there is not a cryptocurrency offering for TD Ameritrade clients. Any future offering will be dependent on when ErisX completes its product development and obtains regulatory approval. Since last December, though, we’ve enabled a subset of experienced futures traders access to bitcoin futures products offered on the Cboe Futures Exchange. Investors interested in cryptocurrency trading at TD Ameritrade can email crypto@tdameritrade.com for updates.

Why Cryptocurrency Trading Now? Digital Assets Today

The short answer? Cryptocurrency trading, and more broadly, blockchain aligns with our roots and leadership in fintech.

When bitcoin entered the scene a few years back, it was seen by many as a neat little experiment that may or may not pan out. And while some were arguing the merits of a decentralized currency, others looked at blockchain, the technology underpinning bitcoin, as the future.

Blockchain is essentially a digitally-distributed ledger that keeps a record of all financial transactions within it. As bitcoin moved from niche to mainstream, blockchain moved from supporting actor to a starring role, in fintech and across industries.

Will blockchain and cryptocurrencies live up to the recent hype? No one can see the future, but it’s clear that firms have been paying particular interest, and often investing heavily, in digital assets. It started with the financial sector. At its core, blockchain is a payment and settlement mechanism, so naturally banks, exchanges, and other financial participants took the early lead in terms of practical uses. A 2018 study by capital markets consulting group Greenwich Associates, for example, estimates that total annual budgets for blockchain initiatives among capital markets and banking are about $1.7 billion. Study participants, which came from within the financial industry, identified several practical uses, including “streamlining operations, shortening settlement time, and reducing risk and cost of capital.”

Other use cases include real estate transactions (and anything involving contracts), intellectual property protection, data management, regulation, governance and more. As these technologies develop, new cryptocurrencies have been created to support them.

ErisX aims to offer a stable, regulated and transparent exchange for cryptocurrency spot and futures products. With its strategic investment, TD Ameritrade aims to make digital currency products more accessible to retail clients.

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Certain aspects of this offering are subject to regulatory approval. ErisX, Eris Exchange, and the ErisX and Eris Exchange logos are trademarks of the Eris Exchange group of companies.

Virtual currencies, including Bitcoin, experience significant price volatility, and fluctuations in the underlying virtual currency’s value between the time you place a trade for a virtual currency futures contract and the time you attempt to liquidate it will affect the value of your futures contract and the potential profit and losses related to it. Be very cautious and monitor any investment that you make. Like all futures products, speculating in these markets should be considered a high-risk transaction.

Futures trading is speculative, and is not suitable for all investors. Please read the Risk Disclosure for Futures and Options prior to trading futures products.

Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).

Futures and futures options trading services provided by TD Ameritrade Futures & Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify.

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Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.

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