LedgerX Becomes First Company To Launch Physically-Settled Bitcoin Futures

Who had thought that it will play out like this! While we were waiting for the physically-settled Bitcoin futures of Bakkt platform or ErisX platform, LedgerX has beaten both to emerge as the first company offering this new class of assets. The launch has been a quite silent affair, but now it’s bound to make some noise given the various features inherent in these futures.The news of the launch was first reported by Coindesk. According to their report, the new futures contracts launched by LedgerX will allow both institutional and retail traders to pour their money into them. Anyone who can pass the know-your-customer (KYC) process will be able to purchase them, which increases their appeal significantly. By comparison, if these futures would’ve been made available only to institutional investors with lots of money, they wouldn’t have had the kind of appeal that they’ve now.The futures are physically-settled, which means that the buyers are paid out in BTC based on the value of their contracts. They can also purchase the contracts by paying in Bitcoins. It is this distinction which separates the contracts of LedgerX from the Bitcoin future contracts of other companies. Here’s what LedgerX CEO Paul Chou told Coindesk about their new offering:“Not only are they delivered physically in the sense that our customers can get bitcoin after the futures expires, but also they can deposit bitcoin to trade in the first place. Cash-settled is cash-in and cash-out, we’re bitcoin-in and bitcoin-out.”Chou also said that due to this distinctive nature of their futures product, people don’t need the help of US Banking system to participate. He said:“If you imagine somebody that deposits bitcoin, they would not have to use the U.S. banking system at all. That’s why physically-settled is very important. I think [it’s] one of the most unique use cases for bitcoin, where you’re using cryptocurrencies as the only collateral. 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.”Chou further revealed that they would’ve launched these contracts way back in April itself if CFTC would’ve granted them the necessary license. They had applied for the license way back in November 2018, but the license was issued last month only. He also commented on why they’ve made these contracts available to both institutional as well as retail traders:“We’ve been involved in this business for the last six years and we have not only been getting institutions on board but we’ve spent a lot of time educating regulators on why this is important. Cryptocurrencies are for everybody and we never started this looking to offer just to hedge funds or institutional clients.”Interested users can purchase the contracts from company’s Omni platform.