A British cryptocurrency exchange is planning to enter the bitcoin futures market.
CoinfloorEX, a London-based exchange founded in 2013, announced Wednesday that it would launch bitcoin futures contracts next month, joining a number of other companies to offer such product to their customers, according to Reuters.
Notably, unlike some of its competitors, Coinfloor will offer physically settled futures contracts, the wire service reported, meaning when the contract is set to expire, the actual asset being traded will be delivered (in this case, bitcoin). The bitcoin futures contracts offered by CME and Cboe are cash settled, and do not deliver bitcoin to the contract's owners.
The product came in response in part because of demand from some of the exchange's customers, Coinfloor co-founder Mark Lamb told Reuters. He explained:
"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."
Stepping back, Coinfloor is at least the fifth company to offer bitcoin futures contracts, joining Bitmex, CryptoFacilities, CME Group and the CBOE. The U.S.-based CME and Cboe offer cash-settled contracts, as does the UK-based CryptoFacilities.
The concept of bitcoin futures is still controversial, with the U.S. Commodity Futures Trading Commission announcing it would work on a "heightened review process" for any further futures contracts after receiving pushback on the existing products.
Similarly, several senators requested further information about the CFTC's oversight of such products, noting that taxpayers should be protected from "fraud, manipulation and abusive practices in the futures and options markets."
Coins image via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
$10K Test? Bitcoin Price Hits 4-Week High As Altcoins Shine
Bitcoin hit four-week highs in Asian hours but continues to underperform when compared to alternative cryptocurrencies (altcoins).
Having scaled a long-term bearish trendline, the world's largest c
DOJ Charges ICO Co-Founder With Securities Fraud
The Department of Justice has unveiled fraud charges against another co-founder of cryptocurrency startup Centra, a move that comes weeks after two other founders were arrested and charged.
Russia's Supreme Court Orders Review of Crypto Website Ban
The Supreme Court of Russia has directed a court in the city of St. Petersburg to consider an appeal against a blocked cryptocurrency information website.
According to Russian legal information sit
Quebec's Chief Scientist Denies Dismissing Crypto Concerns
Contrary to recent media reports, the Chief Scientist of Quebec has not downplayed concerns about the illicit use of cryptocurrencies, his office said.
On Thursday, several media organizations publ
Amazon Web Services launches 'blockchain templates'
Amazon.com wants to make it easier for developers to create projects based on the blockchain technology underlying bitcoin and other cryptocurrencies. The company's cloud computing division
Cloud Giant Xunlei Claims Blockchain Advance With 'ThunderChain'
Xunlei, the NASDAQ-listed cloud network provider, has launched its proprietary blockchain platform, despite ongoing class actions over an alleged initial coin offering (ICO).
At a press event in Be
Taiwan Eyes November Deadline for Bitcoin AML Regulation
Taiwan aims to formally regulate bitcoin under anti-money laundering (AML) rules before the end of the year.
According to the Taiwan Central News Agency, Chiu Tai-san, the country's minister of jus
Bitcoin Bull Trap? Not So, Says Lesser-Known Price Indicator
Is the reversal of a lesser-known bitcoin price indicator signaling a bull trap?
That's the question being asked by Twitter's more expert crypto analysts after bitcoin's rise to $8,500 this week, a