Physically-Backed Crypto Futures for Bitcoin, Ethereum and Bitcoin Cash Set for Imminent Launch

CoinFLEX says it will roll out physically-backed Bitcoin, Ethereum and Bitcoin Cash futures in a matter of days. The Hong Kong-based company is a spin-off of Coinfloor, the UK’s oldest Bitcoin exchange, and is partly owned by Bitcoin Cash evangelist Roger Ver and Chicago-based fintech company Trading Technologies International.

CoinFLEX just launched its website and plans to offer Asian clients up to 20x leverage on all three cryptocurrencies.

For months, the crypto community has been clamoring for physically-backed futures, which are paid out with the underlying cryptocurrency, instead of cash.

In a recent interview with Bloomberg, CoinFLEX CEO Mark Lamb explains the importance of physically-settled futures.

“If you’re trading a cash-settled future, you’re open to manipulation of the index at the time of settlement. If you’re a market maker where you’re doing a basis trade, where you’re arbitraging the cash and spot markets, the cash markets versus the futures market, what you really want to be sure about is, at the time of expiry, you know exactly what you’re going to get…

“With a physically-delivered future, it really ties the future’s price to the actual, underlying asset because at expiry, everyone knows what they’re going to get. Everyone who’s short, delivers Bitcoin, receives cash. Everyone who’s long, delivers cash, receives Bitcoin. So that kind of tying down to the real world allows these types of futures to be used for much more than just speculation. They’re great speculative tools, but they become useful for commercial hedging, hedging miner exposure, hedging and OTC trade, or making markets.”

Meanwhile, Intercontinental Exchange, owner of the New York Stock Exchange, is waiting on the Commodity Futures Trading Commission to approve the launch of its new crypto trading platform, Bakkt, which will deliver physically-backed crypto futures in the US.

After missing two target launch dates, the company now says it will launch “later this year”, pending regulatory approval, and calls the project its “moonshot bet” on Bitcoin and crypto.

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