Bitcoin Futures Approved by CFTC, Physically-Backed Contracts Coming to Institutions and Retail Traders

The US Commodity Futures Trading Commission is giving LedgerX, a US-regulated Bitcoin derivatives exchange and clearinghouse, the go-ahead to launch physically-backed Bitcoin futures contracts.

The approval sets the stage for the first Bitcoin futures product in the US that’s actually paid out in Bitcoin. Although Chicago exchanges Cboe and CME launched Bitcoin futures in late 2017, those contracts are entirely settled in fiat.

Both retail traders and institutional investors will be able to invest in the new BTC futures contracts from LedgerX, reports CoinDesk. So far, the New York-based company has not released an official launch date, but chief operating and risk officer Juthica Chou says the company is pushing to roll out the product as soon as possible.

“There’s no doubt that we’re looking to be first, we’re looking to be the incumbent. We think we’re better positioned and we want to be there to serve customers of all sizes.”

A number of other companies are pushing to enter the space, including ErisX and Bakkt, which is a subsidiary of Intercontinental Exchange.

Through it’s Omni initiative, LedgerX already supports swaps and options trading for retail users. Chou told The Block back in April that the launch of futures is part of an overall strategy to bring more retail traders into Bitcoin.

“I think at this current time we don’t see the demand growing among really large institutions and banks. We are still an $85 billion market cap for bitcoin — really just the size of a large stock. Right now we see the opportunity towards the other end of the spectrum.”

Bitcoin has now reached a market cap of $202 billion with BTC currently topping $11,300, up 2.9% in the last 24 hours, and Bitcoin futures breaking above $11,000 on Tuesday.

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