CoinFLEX, a new cryptocurrency exchange that focuses on futures trading, is now live. The platform was first announced last month and investors can now trade futures contracts for digital assets such as Bitcoin Core (BTC), Bitcoin Cash (BCHABC) and Ether (ETH). All three are paired against the Tether (USDT) stablecoin.
CoinFLEX is based in Hong Kong and incorporated in the Republic of Seychelles. It is owned by a group that includes Coinfloor, Global Advisors, Alameda Research, Dragonfly Capital Partners, crypto trader Mike Komaransky and others. It is headed by CEO Mark Lamb, the co-founder of Coinfloor, who announced the new trading desk last year.
In a Medium post discussing the launch of CoinFLEX, Lamb said, “Futures and options have a huge impact on the world, are extremely liquid ways to trade, invest and hedge risk, and yet the two largest futures exchanges (CME and ICE), which dominate the market are only worth a combined $100 Billion. This is dwarfed by just the top four banks in the U.S., which are worth a combined $1 Trillion. This is further dwarfed by a number of companies in the tech industry, which occasionally sees a single tech giant reaching a trillion dollar valuation.”
The exchange will offer leverage of up to 20 times the investment amount. It now reportedly becomes the first physically delivered crypto exchange, meaning that there is no risk associated with cash price settlements. CoinFLEX’s taker fee is 0.03% and includes 99% multi-signature cold storage.
Traditional futures exchanges have a number of layers between the investor and the exchange. They include brokerage firms, futures commission merchants, clearing members and others, with most investors required to be high net worth individuals or professional traders. However, according to Lamb, crypto futures exchanges can allow any crypto enthusiast from anywhere to trade directly with the exchange and adds, “Virtually anyone can sign up regardless of wealth, geographic location, or whether or not he or she has a bank account.”
Other exchanges have indicated that they are considering launching physically traded crypto futures trading. Most notably, the NYSE’s parent company, Intercontinental Exchange, is expected to introduce the Bakkt exchange this year, and the Eris Exchange out of Chicago has indicated that it has plans to launch its own futures trading platform, as well.
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