A day after I warned on twitter that the CME would have its hands full trying to launch bitcoin trading in just over a month—the bitcoin exchange the CME was planning to use for bitcoin futures went down. Bloomberg reports:
Clients of San Francisco-based Kraken are seeing slow responses from the website, connection timeouts and delays in withdrawals, the cryptocurrency exchange said in a statement. “We are investigating these issues and working to resolve as quickly as possible,” the statement said.
Apparently, it’s not the first time there have been problems:
Problems in the fifth-biggest exchange by bitcoin trading volume come just three days after Seoul-based Bithumb’s servers crashed as a sudden surge in usage caused a connection failure. The issues raise concerns about whether largely unregulated exchanges, without the safeguards of securities bourses, will be able to reliably provide prices for indexes tied to futures and exchange traded funds, and cope with higher trading volume that could come if institutional investors start buying cryptos.
Interestingly, some consumer advocates and market participants have criticized the notion of listing bitcoin derivatives with other products since they are not tethered to clear economic fundamentals, even as their value explodes. Interactive Brokers LLC reportedly even took out a full-page add in the Wall Street Journal adding that there’s there’s no mature, regulated underlying market.