UK-based cryptocurrency exchange Coinfloor will launch the world’s first “physically delivered” Bitcoin futures contracts in April 2018, an executive told Reuters March 14.
Speaking to Reuters during the Futures Industry Association’s annual conference in Florida, Coinfloor’s co-founder Mark Lamb announced that the exchange would shortly unveil a dedicated futures exchange called CoinfloorEX, which would showcase the pioneering product.
The exchange confirmed the news on Twitter Thursday, March 15.
Lots of information on our website https://t.co/T33wWLfjMp https://t.co/EKmdsEKHbp
— Coinfloor (@Coinfloor) March 15, 2018
“Physically delivered” Bitcoin futures contracts differ from those currently on offer from US platforms CBOE and CME Group in that they will deliver the underlying asset, BTC, upon the futures’ specified delivery date, whereas according to the current model, investors receive dividends in fiat.
This, Lamb says, eradicates security concerns from some sources about cash-settled contracts, which could become subject to price manipulation. He told Reuters:
“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.”
Despite criticism from some commentators over investors seeing underwhelming returns from futures contracts so far, in an interview with Cointelegraph this week, CBOE director for product development Dennis O’Callahan said the company was trading almost 7000 of them daily.
“We have seen a lot of interest, especially retail interest, by some retail firms,” O’Callahan said about continued appetite for cash-settled contracts. “We like what we have done, and we are pleased with the progress the product has made.”