The UK based bitcoin exchange, Coinfloor is becoming the first exchange to offer physically settled bitcoin futures contracts in next month by launching a futures exchange for digital assets called CoinfloorEX.
Coinfloor to launch the first physically delivered bitcoin futures
The UK based cryptocurrency exchange Coinfloor is launching a trading platform called CoinfloorEX that is basically aimed at hedge funds, commercial traders, proprietary trading firms, a specific group of retail investors and cryptocurrency miners.
The first physically delivered bitcoin futures contract will be launched in April.
This London based trading platform will be launching the BTC futures contract next month. However, unlike many of its competitors, Coinfloor will be offering the future contracts that would be settled physically. This means when the contract will expire, the asset that is being traded meaning bitcoin, will be delivered.
The traditional futures exchanges like CME and Cboe also offers bitcoin futures contracts but they are cash settled wherein the owner doesn’t receive any bitcoins.
Mark Lamb, the co-founder, and CEO of the Coinfloor explained that:
“When you talk to the liquidity providers, they all say the same thing, which is they want a physically delivered futures contract so they can hedge their exposure across exchanges.”
Several large customers and proprietary trading firms have shown their concern regarding the cash settled process is extremely easy to manipulate. Lamb further explained that the bad actors can try to change the prices of the auctions or indexes on the spot exchanges in their favor.
Also, read… Learn to Trade in Bitcoin Futures in 5 minutes
UK’s biggest bitcoin exchange extends its bitcoin marketplace
With this step, Coinfloor joins the ranks of CME, CBOE, Bitmex, and CryptoFacilities. Except for Coinfloor, all of these firms offers the future contracts in cash settlement.
Coinfloor that was started in 2013, runs the largest spot exchange in London along with another one named Gibraltar. In 2015, it established Coinfloor Market which is the first exchange-backed Bitcoin Marketplace.
This marketplace provides a secure environment for the retail investors to trade in bitcoin in the UK. Here, a direct interface to a verified Coinfloor broker is provided to the buyers that can directly stream their bitcoins into sterling and vice-a-versa.
This is certainly a big move by the UK’s biggest bitcoin exchange but the idea of BTC futures is still debatable as US’s CFTC is working on its review process to ensure its integrity.
What are your views on Coinfloor launching the physically settled bitcoin futures contracts? Let us know below!
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.