- TD Ameritrade
- Business Insider recently interviewed the CEO of TD Ameritrade, one of the largest online brokerages, to talk stocks, cryptocurrencies, and millennials.
- He says the bitcoin market is far from mature, and that the interest in cryptocurrencies and related stocks was correlated with bitcoin’s price.
The bitcoin and cryptocurrency craze has taken Wall Street by storm, and retail investors on online brokerage TD Ameritrade are no exception.
In an interview with Business Insider, Tim Hockey, CEO of the $1.2 trillion online brokerage giant, explained why he and his firm were cautious about cryptocurrencies, despite intense interest from seemingly every type of investor.
Hockey explained TD Ameritrade’s approach to the recently launched Cboe bitcoin futures market. “We just turned on the Cboe product in a very limited release – just to futures clients that were more sophisticated and understood the risk they were taking – and we’ll expand that over time,” he said.
“This market is certainly not mature. I would say that what we saw in terms of levels of absolute interest prior to the holiday season seemed to peak. Everybody was talking about crypto of all types all the time because it seemed like it was a one-way increase.”
Hockey said the frenzy was roughly correlated with bitcoin’s price, which has seen extreme volatility in the past year. When bitcoin finally saw a correction last week, trading volumes declined on TD Ameritrade.
“Ever since the pricing has been normalized and there’s been a bit of a correction, then you’ve seen a little bit less froth, if you will, in the market,” he said. “We’ve actually seen that in the first few weeks of January, crypto trades – not just the Cboe product, but companies that are related to blockchain – have contributed a couple of points less toward our trading activity. It seems to have peaked just before the holidays.”
Like many other executives on Wall Street, Hockey was careful to draw a distinction between cryptocurrencies, like bitcoin, ethereum, and hundreds of others, and blockchain, the distributed ledger technology that powers cryptocurrencies and could have applications in nearly every industry.
“There’s a distinction between blockchain and cryptocurrencies, but they are absolutely being conflated in many people’s minds,” Hockey said. “The technology certainly has not matured, and I believe the transformative nature of what blockchain can do is only just starting to be understood by the majority of the world.”