[2019-07-31] Beating Bakkt, LedgerX Is First to Launch ‘Physical’ Bitcoin Future

[Lucius]

Beating Bakkt, LedgerX Is First to Launch ‘Physical’ Bitcoin Futures in US

• Bitcoin derivatives provider LedgerX announced it has launched the first physically-settled bitcoin futures contracts in the U.S. Wednesday.
• The contracts, which pay traders out in bitcoin, rather than U.S. dollars, will be available to both institutional and retail investors.
• Customers can deposit bitcoin, rather than dollars, when buying a contract.
• LedgerX has beaten the Intercontinental Exchange’s Bakkt and TD Ameritrade-backed ErisX to the punch with its new offering.
• Any U.S. resident with a government-issued I.D. can now trade futures contracts for real bitcoin.

https://www.coindesk.com/beating-bakkt-ledgerx-is-first-to-launch-physical-bitcoin-futures-in-us


I would say this is very good news for US residents who want to operate only with Bitcoins, and they can do that 24/7/365 which is something that completely knocks the banks out of the game. What I am interesting more, is this option with physically-settled bitcoin futures can have some significant impact on crypto market since it is only available to US residents?

[Betwrong]

~
I would say this is very good news for US residents who want to operate only with Bitcoins, and they can do that 24/7/365 which is something that completely knocks the banks out of the game. What I am interesting more, is this option with physically-settled bitcoin futures can have some significant impact on crypto market since it is only available to US residents?

Around 10% of Americans own Bitcoin. I believe this percentage is much higher than anywhere in the world.

According to Bitnodes, the United States holds 24.4% of the total number of nodes around the world.

Also, according to this recent article in Forbes, 36% of U.S. investors, although seeing gold as a good investment, would consider buying Bitcoin.

In short, there are a lot of potential Bitcoin adopters in the U.S., and I'm sure this news can speed up the process of adoption among them. I believe there is a significant impact on crypto market already. Check out CoinMarketCap.

[buwaytress]

~
I would say this is very good news for US residents who want to operate only with Bitcoins, and they can do that 24/7/365 which is something that completely knocks the banks out of the game. What I am interesting more, is this option with physically-settled bitcoin futures can have some significant impact on crypto market since it is only available to US residents?

Around 10% of Americans own Bitcoin. I believe this percentage is much higher than anywhere in the world.

According to Bitnodes, the United States holds 24.4% of the total number of nodes around the world.

Also, according to this recent article in Forbes, 36% of U.S. investors, although seeing gold as a good investment, would consider buying Bitcoin.

In short, there are a lot of potential Bitcoin adopters in the U.S., and I'm sure this news can speed up the process of adoption among them. I believe there is a significant impact on crypto market already. Check out CoinMarketCap.

Also that the individual whales do seem to be from that part of the world, if not related to it. The signs, visible and invisible, continue to point to a dominance in USA, although judging from node distribution metrics lately, it would seem that dominance is chipping away (but still, to the developed North/West).

And the Coinbases and Bitpays of USA are expanding to these very territories anyway, so yeah, I'd say that if Bitcoin-settled futures were to affect the market, Americans would be enough of a force.

[figmentofmyass]

“As a digital commodity, bitcoin trades 24/7/365 and our customers expect that from us, so if you trade Sunday night, the banking system did not have to be open.”

so the market never closes? that's a breath of fresh air for a regulated commodity market. the CME cash-settled product has huge gaps between closes and opens.

What I am interesting more, is this option with physically-settled bitcoin futures can have some significant impact on crypto market since it is only available to US residents?

oddly, it's available for singapore residents too. i'm not sure they are necessarily restricted to those markets either. either way, if there's high volume and deep liquidity, it will affect spot markets.

[gentlemand]

Around 10% of Americans own Bitcoin.

Yeah.

Right.

That's typical survey bilge I reckon. As for whether the 1-4% of American Bitcoin owners being interested in this, 90 or more per cent probably got theirs from Coinbase or the Cash app so the idea of futures will be completely and utterly alien.

I well remember the first time LedgerX was heading for launch however many years ago it was. For months it was touted as the thing that was going to turn things around. Then it launched and was immediately forgotten.

I predict ongoing radio silence just like last time.

[1Referee]

Launching Bitcoin futures before Bakkt is pretty meaningless. Bakkt has the contacts within the institutional world and the tools necessary to make them use their platform instead of LedgerX. Institutions will more likely be drawn to a platform operated by an entity that they are familiar with, which definitely applies to ICE.

LedgerX is and very likely will remain a platform for retailers. In an interview Juthica Chou (CEO of LedgerX) said that LedgerX's average montlhy volume was between $40-$50 million, which is peantus. It will be interesting to see if they manage to boost their volumes with their newest product addition.

The good thing about more platforms offering this product is that people have a choice now. Choice is always a win for people.

[BitHodler]

I legit wonder how much demand there is for physically settled Bitcoin futures. CME has done an exceptional job providing the US a convenient platform for cash settled futures, so much so that CBOE gave up.

It's not unthinkable that these physically settled Bitcoin futures will not be popular because those who actually trade these products are just looking to capture Bitcoin's potential, which CME's futures already do successfully.

The only difference that might appeal to people is that Bakkt's contracts provide a 1BTC entry point, while the CME contracts start at 5BTC per contract. This is a pretty significant difference at today's prices.

[Slow death]

maybe I'm asking a stupid question, but I'll do it anyway:

Why the hell has BAKKT not yet got regulatory approval while his small competitor is already operating?

This is humiliating and sad to see, I do not understand, can anyone explain to me how this is possible? What LedgerX has to be better than BAKKT? because honestly, I don't understand how it is possible LedgerX to be first than BAKKT

[gentlemand]

Why the hell has BAKKT not yet got regulatory approval while his small competitor is already operating?

Though it's a little hard to tell I think Bakkt have approval now. What differentiates LedgerX is that they've been running for years whereas Bakkt is scratch built. Putting something like that together takes a lot of doing even if you have the funds and the contacts.

[Lucius]

Around 10% of Americans own Bitcoin. I believe this percentage is much higher than anywhere in the world.

I do not trust too much in such data, particularly because of very strict rules of the game when it comes to cryptocurrency in US - and the fact is that Americans are prone to exaggeration, something like "we are best in the world in everything".

Regarding that impact of $200 - $300 on price, I doubt LedgerX has something to do with it.

oddly, it's available for singapore residents too. i'm not sure they are necessarily restricted to those markets either. either way, if there's high volume and deep liquidity, it will affect spot markets.

Very strange, how they manage to allow this service to Singapure residents - is that mean that this service may also become available in other countries?

[gentlemand]

And after all that it has emerged that the CTFC have said they haven't approved LedgerX yet after all.

'on Thursday morning, the day after CoinDesk’s initial story ran, CFTC chief communications officer Michael Short said in an emailed statement: “LedgerX has not yet been approved by the Commission.”

https://finance.yahoo.com/news/happened-why-first-us-physical-171023296.html

A bit of egg on face there.

[squatter]

And after all that it has emerged that the CTFC have said they haven't approved LedgerX yet after all.

'on Thursday morning, the day after CoinDesk’s initial story ran, CFTC chief communications officer Michael Short said in an emailed statement: “LedgerX has not yet been approved by the Commission.”

According to CFTC regulations, the DCO registration amendment should have been approved by default, so I can see how LedgerX made the mistake:

According to CFTC regulations (Title 17 part 39.3), the agency has 180 days to approve or deny a DCO application.

“[The CFTC] said to clear swaps and they said later that [we] should actually clear futures too and … we were waiting essentially for this amendment,” Paul Chou told CoinDesk Thursday.

Juthica Chou appeared to suggest that because this period had passed without an objection from CFTC, the company was under the impression that it was clear to proceed.

However, LedgerX needs explicit approval, according to a senior CFTC official.

“Every new or amended DCO application needs to be affirmatively approved by the Commission,” said this official, who did not want to be identified. “The absence of a decision does not constitute approval, and entity self-certification is not an option.”

Bakkt seems to be in a similar position with the NYDFS. Some people assumed that NYDFS trust status was a sure thing or perhaps didn't require explicit approval, but that seems to be exactly what they're waiting on.