Moody’s: Bitcoin Volatility (Likely) Won’t Hurt CME’s Risk Rating

Credit rating service Moody’s said Wednesday that it doesn’t believe the launch of bitcoin futures will hurt the creditworthiness of either CME or Cboe.

Moody’s published the report earlier today, a move that comes nearly two months after the exchanges first moved to list the derivative products. The 11-page release argues that the combination of risk management controls at the two firms, as well as the nascent state of that market, reduces those risks.

The service wrote:

“So far Bitcoin futures volumes have been low, but CME and Cboe hope to tap into the investment community’s interest in the underlying asset. Bitcoin prices have been highly volatile, but we don’t expect this market risk to materially affect CME’s or Cboe’s creditworthiness given the small volumes involved and strong risk management at the central counterparty clearing houses (CCPs).”

The report presents a combination of observations on the development of those futures markets to date, as well as an examination of the issues Moody’s believes, are most pressing in this context, including the volatile price of bitcoin. That said, the report’s authors say that moves to request higher margins for bitcoin futures trades helps lessen the risks…

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