Crypto Exchange Coinfloor To Offer Physically Settled Bitcoin Futures Contracts

Francisco Memoria
  • Coinfloor is set to launch physically settled bitcoin futures contracts in April
  • Larger exchanges like the Cboe and CME offer cash settled futures contracts, so bitcoin never changes hands in these
  • Coinfloor is the fifth exchange to offer its customers bitcoin futures

UK-based cryptocurrency exchange Coinfloor is set to launch bitcoin futures contracts in April, joining a number of other companies offering these products to their customers. According to Reuters, Coinfloor will offer physically settled futures contracts.

Per the report, Coinfloor will offer its users bitcoin futures contracts through a trading platform dubbed CoinfloorEX. The contracts are aimed at “proprietary trading firms and sophisticated retail investors,” as well as cryptocurrency miners.

Since the futures contracts are physically settled, these will be delivered in the asset being traded, bitcoin in this case. Bitcoin futures contracts offered by larger exchanges like the Chicago Board of Exchange (Cboe) and the Chicago Mercantile Exchange (CME) are cash settled, so don’t actually deliver contract owners any bitcoin.

Coinfloor’s new product comes in response to customer demand, according to the company’s co-founder Mark Lamb. Speaking at the sidelines of the Futures Industry Association’s annual conference in Boca Raton, Florida, he stated:

“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.”

Coinfloor co-founder Mark Lamb

Coinfloor has a daily trading volume of about $5 million, with its biggest trading pair being BTC/GBP. The British Pound (GBP) currently makes up for about 0.28 percent of bitcoin’s daily trading volume, according to data from CryptoCompare. The firm reportedly runs the largest UK-based cryptocurrency spot exchange in London, and another one in Gibraltar.

The UK-based exchange is the fifth company to offer bitcoin futures contracts as BitMex, CryptoFacilities, the CME Group and the Cboe already offer them. Recently, several US senators asked the country’s Commodity Futures Trading Commission (CFTC) for more information on these products, claiming taxpayers should be protected from “fraud, manipulation, and abusive practices.”

According to MarketWatch, Cboe may soon add futures contracts for other cryptocurrencies, as the company's director Dennis O’Callahan revealed that, among other items, the exchange was “evaluating other cryptocurrencies.”

Crypto Market Update for 24 February 2020: BTC, ETH, ADA, and TRX

Siamak Masnavi

This article provides an overview of how Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and TRON (TRX) have been doing over the past 24-hour period, and covers recent news that might have affected their prices (or might do so in the future).

To give you a rough idea of how well the crypto markets are doing today, 18 out of the top 20 cryptoassets (by market cap) are currently in the red (against the dollar).

All market data used in this article was taken around 10:00 UTC on 24 February 2020 from CryptoCompare, which also provided the price charts shown in this article.

Bitcoin

BTC-USD 24 Hour Chart on 24 Feb 2020.png

BTC-USD is trading at $9,715. This means that the Bitcoin price has been under the $10K level since February 20. Still, Bitcoin has still managed to gain +37.60% against USD in the year-to-date (YTD) period.

As for why Bitcoin is having trouble breaking through the $10K level, one theory is that Bitcoin is currently being seen more as a "risk-on" rather a "risk-off" asset; another is that Bitcoin whales are manipulating the market.

Here is prominent crypto analyst/trader Josh Rager with some technical analysis of Bitcoin's latest price action:

Ethereum

ETH-USD 24 Hour Chart on 24 Feb 2020.png

ETH-USD is trading at $265.99. Although ETH-USD has dropped 0.92% in the past seven-day period, for the YTD period, it is up +103.37%.

Cardano

ADA-USD 24 Hour Chart on 24 Feb 2020.png

ADA-USD set a six-month high on February 14 when it hit $0.07083. Since then, it's been going downhill.

Although the 7-day and 10-day pictures look bad, Cardano's return-on-investment (ROI) figures (against USD) for the 30-day, YTD, and 90-day periods look quite decent, being +36.99%, +76.77%, and +60.44% respectively.

On February 21, IOHK tweeted that the Cardano network had successfully carried out a scheduled network upgrade (a hard fork) to bring in Ouroboros BFT (a new consensus mechanism):

 TRON

TRX-USD 24 Hour Chart on 24 Feb 2020.png

TRX-USD is trading at $0.0204, which means that TRON is currently the 16-th most valuable cryptoasset by reported market cap.

TRX-USD has dropped -6.35% in the past 7-day period, but so far in 2020, it is up +54.45%.

Earlier today, in an article for Coindesk, Alexander S. Blum, the Chief Operating Officer of crypto finance firm Two Prime, wrote:

"Viewed through the lens of traditional finance, TRON is acting pretty predictably. It is acquiring more market share through the acquisition of weakened competitors, like BitTorrent, and their networks while promoting their retail financial product. They’re performing a balancing act between being a financial product and a technical one...

"Justin is leading TRON as a for-profit business pretty well. Why does that irk many hardcore developers? For those in the Western world sticking up their noses at TRON, it’s worth reflecting on how deeply elitist it is to judge from a position of pure technical idealism...

"The emergence of TRON in highly competitive Asian markets is commendable. They are pioneering a new business model and creating wealth ex nihilo – out of thin air – because they focus on what works today. Their users share the company’s pragmatism. TRON, EOS and Ripple are pioneering community-centric financial products that offer exciting new models for wealth creation."

Featured Image by "AhmadArdity" via Pixabay.com