[2019-06-25] CFTC Approves LedgerX to Settle Futures in Real Bitcoin

[figmentofmyass]

all eyes were on BAKKT to bring the first physically delivered bitcoin futures to market, but it looks like ledgerX might beat them to the punch. according to the bloomberg article (paywalled) trading is slated to start in july, when BAKKT will still only be in the testing phase. notably, these futures will be available for both retail and institutional traders.

this is a pretty big deal. the regulated cash-settled markets offer no way for buyers to accumulate real bitcoins so they don't represent real supply and demand. with physical delivery, we could see supply and demand on these markets spilling over into the spot markets.

from coindesk:

The Commodity Futures Trading Commission (CFTC) has cleared bitcoin derivatives provider LedgerX to offer physically settled bitcoin futures contracts.

The CFTC said Tuesday it had approved LedgerX’s application for a designated contract market (DCM) license, meaning the company can now offer the new futures contracts. LedgerX is the second company to receive approval to offer physically settled bitcoin futures; other firms, such as Intercontinental Exchange’s Bakkt, Seed CX and ErisX plan to enter this market. (While Bakkt’s own futures contracts have been self-certified, the firm is waiting for the New York Department of Financial Services to license its warehouse).

Unlike the cash-settled bitcoin futures listed by the Chicago exchanges Cboe and CME, in physically settled futures the buyer receives the underlying commodity when a contract expires, rather than the fiat equivalent.

Monday’s approval means that New York-based LedgerX can not only list these bitcoin futures contracts but crucially can offer its products to retail clients, not just institutional ones.

No timeline was provided for when LedgerX might start to offer futures. but chief operating and risk officer Juthica Chou told CoinDesk that the company was looking to be the first provider of this product in the U.S.

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

[BitHodler]

This is quite impressive, that I must admit. I wonder how the guys over at Bakkt feel now they have been outplayed by a much smaller entity, and that with just one attempt if I'm not mistaken.

Bakkt once approved will definitely attract more market share due to their backers and their overall brand awareness, but it will be interacting to see if LedgerX will be able to generate noteworthy volumes.

I don't hear anything about Nasdaq's 2.0 futures anymore, and that while they were quite vocal at the very beginning. I'm not even sure what 2.0 refers to with how little there is known about the actual details.

[1Referee]

Awesome news! We badly needed to counter the demand for cash settled CME contracts by having a trusted entity within the space offer Bitcoin backed contracts.

I hope for Bakkt they have their shit together now they plan to test launch next month without regulatory approval. The only way for this to fail is to have the CFTC stand up and put a stop to their plans. If not, they are operational. If the CFTC ends up blocking it there is something fundamentally wrong with Bakkt.

I don't hear anything about Nasdaq's 2.0 futures anymore, and that while they were quite vocal at the very beginning. I'm not even sure what 2.0 refers to with how little there is known about the actual details.

2.0 futures refer to being a Bitcoin backed futures product where CME and CBOE only offered cash settled futures.

It seems that these legacy entities have taken too many steps at once without understanding how Bitcoin works and how important being a custodian is. Good job of the CFTC to force them to improve their operation, which means whenever they launch, the product they offer should be safe enough to use, and very likely insured.

[buwaytress]

This is quite impressive, that I must admit. I wonder how the guys over at Bakkt feel now they have been outplayed by a much smaller entity, and that with just one attempt if I'm not mistaken.

Bakkt once approved will definitely attract more market share due to their backers and their overall brand awareness, but it will be interacting to see if LedgerX will be able to generate noteworthy volumes.

I don't hear anything about Nasdaq's 2.0 futures anymore, and that while they were quite vocal at the very beginning. I'm not even sure what 2.0 refers to with how little there is known about the actual details.

If true, definitely impressive (can't read the paywall, I've hit my Bloomberg 3 free articles limit).

Not that I was ever enamoured with all these Bitcoin-settled futures and derivatives but you got to admit, all these contracts bought and settled will have to result in movement of Bitcoin and that's anyway got to effect the network, if not the market. Pretty soon, there'll be people tracking all these futures settlement movements on blockchain the way they're tracking exchanges and whales.

Bakkt definitely will have their ears burning, and they'll now be seen as they hypers without end product.

[Slow death]

This is quite impressive, that I must admit. I wonder how the guys over at Bakkt feel now they have been outplayed by a much smaller entity, and that with just one attempt if I'm not mistaken.

after so much twitter to motivate people, after so much news and information that Bakkt gave, I think that this news must be being a big bucket of cold water for Bakkt. honestly they deserved to have been the first. It's difficult to understand regulators

Bakkt once approved will definitely attract more market share due to their backers and their overall brand awareness

I agree

but it will be interacting to see if LedgerX will be able to generate noteworthy volumes.

I believe they are the reason for the price to have risen to $13300

[cr1776]

Now we just need an ETF and micropayments using lightning universally available on the web.  The ETF will be key eventually, but I'd be surprised to see if prior to the next halving.  This news is another step towards the ETF though.

[BitHodler]

after so much twitter to motivate people, after so much news and information that Bakkt gave, I think that this news must be being a big bucket of cold water for Bakkt. honestly they deserved to have been the first. It's difficult to understand regulators

I think regulators in general are quite clear with their policies but most of the blame should go towards Bakkt because of all the unnecessary hype. They stated launch dates while they didn't even have an approval to launch.

You can't just say we'll launch at this or that date hoping that the CFTC will approve their plarform before the deadline, especially not because they know how things work. It reeks of an attempt to manipulate the market.

I believe they are the reason for the price to have risen to $13300

They may have contributed yes. During a bull market bullish news like this helps adding fuel to the fire. I'm not confident about Bakkt personally, but if they manage to launch next month expect more fire.