Options: The Banks for International Settlements some number of weeks ago announced that they are because they are quasi-regulator of banks around the world it is now possible to have 2% of a bank balance sheet to be crypto. Now there are some pretty big banks in the world. Can you imagine if 2% when the bigger banks were crypto, can you imagine if 2% of the bank were Bitcoin what that would mean for the price of Bitcoin, well that’s in the process of happening. Now digital assets mean a lot of different things to a lot of different people. There are already digital assets that need to trade that can trade. I’ll give you some examples. Airline miles, lot of people in this call probably have airline miles, might don’t even know they have them, have airline miles, maybe have no intention to use them.
There is no reason that those can’t trade on a regulated exchange and there is no reason why they can’t trade in the form of being paired with the appropriate cryptocurrency whatever it happens to be.
Blockchain: So credits may be you subscribe to some service online that you never use. They debit your credit card every month. Maybe somebody wants that service. Maybe you can sell that service to somebody else, that’s a digital asset. So there is no shortage of digital assets that have yet to be truly digitized in the cryptocurrency sense of the word. All of that is in process of taking place. So we expect really similar developments in the world of crypto in the not-too-distant future. Now you might have observed that in Horizon we have a little ETF that we started called the Blockchain development ETF and if you look very closely you’ll see a lot of that ETF is probably traded exchanges and there is a reason for that. So we can’t introduce cryptocurrency especially in digital assets in the sense that I just referenced without having regulated exchanges.
It’s a recipe for disaster. The regulated exchanges have to be properly set up to do these things and that takes a lot of doing. So all the process of happening. So, I personally predicted, it might sound like an outlandish statement, but the day will come when cryptocurrency is going to be the biggest traded assets. I would compare it as think back half a century the Chicago Mercantile Exchange. At that time it was a mere commodities exchange. And as a mere commodity exchange you trade less commodities as it does right now. For example, Bitcoin is a commodity and there was no record of that in the early 70s, 50 years ago. In any event currency became currency futures I should say became tradable. If you go back to the Wall Street Journal at 50 years ago and look up the day that currency future started trading because you always have gone to a bank and exchanged your currency, could even have done a forward swap at a bank.
So you didn’t technically need a future, but we ended up having futures. If you were to read the op-eds in the Wall Street Journal on the day currency futures started trading in the CME and you were to cross out the word currency futures and write in the word cryptocurrency, you could publish that article today. The same things people said then we’re saying now. How much bigger is currency futures than commodities and how much bigger is bond futures and currencies? No one thought about futures although they needed it 50 years ago and now we have it. Look how big it is. I think I hope I’m right about this, I’m doing this memory so forgive me if I misstated slightly, I don’t think I’ll be very far off. I believe that commodities account for about 7% of the revenue of Chicago Mercantile Exchange.
