UK based cryptocurrency exchange operator Coinfloor is about to become the first exchange for digital assets to include physically delivered Bitcoin futures contracts.
First Physically Delivered Bitcoin Futures
Mark Lamb CEO of Coinfloor speaking from Boca Raton Florida introduced the new London based trading platform known as CoinfloorEX. The platform is aimed at commercial traders generally; hedge funds, proprietary trading firms and also a select group of retail investors as well as cryptocurrency miners.
During an interview at the Futures Industry Association’s annual conference about the launch of CoinfloorEX CEO Lamb said;
“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,”
Though a few traditional futures exchanges already offer Bitcoin futures they are cash settled so that the actual cryptocurrency does not change hands.
Lamb detailed the problems that many proprietary trading firms and large investors have with the cash settled process. Saying that it can be too easily manipulated by moving the prices of the indexes or auctions on spot exchanges in order to set prices more favorably for their moves.
Coinfloor Made Buying Bitcoin Simple
Coinfloor, which is London’s biggest Bitcoin exchange, also established the first exchange-backed Bitcoin Marketplace Coinfloor Market in July 2015.
Coinfloor Market established a secure environment for retail investors in the United Kingdom to trade in Bitcoin. Buyers are provided with a direct interface to a vetted Coinfloor Market Broker who can directly stream Bitcoin to Sterling and vice versa from the Coinfloor Exchange.
Mark Lamb compared the model of Coinfloor Market to the start of the NYSE as “committed to a decentralized network of brokers backed by a centralized exchange, Coinfloor is the first institution in the Bitcoin industry to mirror this proven model.”
Storage and security of customers’ Bitcoin is provided by Coinfloor which is 100% cold storage encrypted with multiple layers of security keys in underground vaults. Coinfloor was started in 2013 and includes Chicago based proprietary trading firm DRW among its investors. It runs the largest UK-based cryptocurrency spot exchange and another in Gibraltar. CoinfloorEX expects their first physically delivered contracts to launch in April.