Business 16 March 2018

Gerald Fenech

UK crypto exchange Coinfloor to launch Bitcoin futures in April

One of the top European exchanges based in the United Kingdom is planning to offer Bitcoin-based futures contracts starting next month.

Announcing the development in a tweet, UK-based cryptocurrency exchange Coinfloor said that it will be launching the world’s first “physically delivered” Bitcoin futures contract from April 18. It is not known how this is going to affect the price of the cryptocurrency, since the last time futures were launched in December, the price of legacy Bitcoin (BTC) went down considerably from highs of $20,000 and has never recovered since.

The news was also revealed during the Futures Industry Association’s annual conference that took place in Florida. Coinfloor co-founder Mark Lamb revealed that the UK-based exchange would be delivering a dedicated futures exchange which it decided to call CoinfloorEX that would eventually showcase this trail blazing product.

However, there is a great deal of scepticism in the industry at the moment since the price of BTC appears to continue sliding and it would be rather difficult to predict what the April price for the cryptocurrency would be. In fact, investors who were hoping for a resurgence in March have been bitterly disappointed since the falls in prices across practically all cryptocurrencies is actually in excess that of January. Additionally, the bear market which was supposedly to start recovering in the past days showed no signs of abating.

Unlike the contracts offered by U.S.-based platforms CBOE and CME Group, “physically delivered” BTC futures will deliver the underlying asset on the futures’ specified delivery date. In the current model, BTC futures investors receive their dividends in fiat currency.

This way, security concerns about cash-settled contracts are diminished, according to Lamb. In an interview with Reuters, the Coinfloor co-founder said liquidity providers “want a physically delivered futures contract so they can hedge their exposure across exchanges.”

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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