Rather than creating competition for crypto, the NYSE operating overnight could increase trading volumes for both types of assets.
Continuous stock trading would likely benefit the bitcoin ETF market.
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Posted April 23, 2024 at 5:48 pm EST.
Conventional wisdom might hold that the introduction of around-the-clock stock trading, which New York Stock Exchange (NYSE) officials surveyed market participants on this week would come at the expense of crypto flows. That’s because traders would be able to access the stock market at odd hours, and crypto, which has always traded 24/7, would then lose its monopoly as the only true overnight trading game in town.
But Ilgar Alkeperov, a developer who has worked for crypto and stock market makers, said the NYSE’s proposal becoming reality could actually amp up interest in all asset classes.
That’s especially true, according to Alkeperov, given the growing confluence between equities and digital assets, a development spurred on by spot bitcoin (BTC) ETFs bridging the two.
Read more: Grayscale’s Cheaper Mini Bitcoin ETF May Become More GBTC Sidekick Than Off-Ramp
“If the traditional world is going to be 24/7, then those assets will boost liquidity everywhere,” Alkeperov said. “When the largest venues are open, you have to trade. You have to provide technical support to the automated trading systems, and, as a matter of fact, you will want to make more money while your personnel is in the office — which, in turn, will lead to large volumes, including crypto, as well. Not only on traditional markets — it will just boost everything.”
Ari Redbord, the global head of policy for compliance-focused TRM Labs, said that investor appetite for crypto is only poised to rise as legacy asset classes catch up to its continuous trading. And that would equate to an increase in volumes on digital asset transactions.
“It makes sense in this world where information is 24/7,” he said. “Why shouldn’t the stock market be one of those things? I do really believe that crypto has pushed that [narrative].”
The Financial Times, which first reported the NYSE news, said the exchange is surveying whether an extended exchange day should be limited to weekdays. While the exchange is officially open from 9:30 a.m. to 4 p.m. in New York, brokerages such as Robinhood already have extended trading hours.
But it’s still early. And the NYSE’s consideration may not come to fruition, even considering that Wall Street titans such as Steve Cohen are seeking SEC approval for their own 24/7 trading operations.
Better Price Tracking for Bitcoin ETFs
Even so, the idea has yet to meet serious opposition — regulatory or otherwise — leading crypto traders to pay attention to what would happen if, well, it happens.
Bartosz Lipinski, CEO of crypto trading platform Cube Exchange, wrote in a Telegram message that he expects the impact on crypto volumes to be minimal if 24/7 stock trading materializes, with overnight volumes staying “somewhat similar to where they are today.”
Volumes aside, continuous stock trading could benefit the BTC ETF market, according to Lipinski.
“It [would enable] more accurate price tracking for the funds,” he said. “If they trade 24/7, similarly to crypto, it would make sense that there is less of a delta between the NAV and the overall value of the fund’s [assets under management].”
Read more: There Are Now 11 Spot Bitcoin ETFs. Here’s the One That’s Best for You
TRM’s Redbord said NYSE’s explorations indicate that Wall Street is “adopting some of the promise of crypto,” pointing to an eventual market where “crypto and Wall Street not only coexist, but there’s an ecosystem of different types of assets that people engage with.”
Similar to the bitcoin ETF wave, according to Redbord, those assets would merge traditional financial instruments with digital ones, creating new trading opportunities.
“What we’re seeing is ‘Generation Crypto’ influence the traditional financial system in a really meaningful way,” he said. “This is what people today want … Through a Coinbase account or in their own self-hosted wallet, they want [crypto] 24/7, but they also want to be invested in the stock market. But they want to do it 24/7, on their own terms.”
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