LedgerX, a U.S. cryptocurrency exchange based in the famously anti-crypto state of New York, has won approval from regulators to trade Bitcoin futures settled in the currency itself, representing a step forward in creating a Bitcoin-based derivatives market. LedgerX is one of a number of companies seeking clearance from the Commodity Futures Trading Commission (CFTC) to trade physically-settled futures and swap contracts in Bitcoin, and CFTC approval now allows them to offer institutional and retail investors futures, swaps and options in both the U.S. and Singapore.
— LedgerX (@ledgerx) June 25, 2019
Good News For All?
The granting of the license is great news not just for LedgerX but for those with a stake in the likes of Bakkt, which has seen CFTC-related delays, as well as ErisX and SeedCX, who will now be feeling much more confident about receiving the green light. Bakkt stated during Consensus in May that they would start taking delivery of Bitcoin futures from late July, suggesting that they too have been all but rubber stamped. This cluster of platforms have grown frustrated at the lengthy application process and constant delays, during which time Chicago exchange giant CME Group has been able to build up their market share over the past 18 months.
Bitcoin-settled Futures Are Here
Bitcoin enthusiasts have long complained of the cash-settled futures contracts being the only type available, so the addition of a Bitcoin-settled platform will be music to their ears, and could explain in part the recent rise in price of BTC as institutions buy up the asset in advance of their launch. LedgerX said in a blog post announcing the approval that while obtaining CFTC clearance was the biggest hurdle by far, the road was still long:
On-boarding will be performed slowly and require your patience, to allow us to thoroughly test and monitor the technology systems throughout the process, and to make sure that the customer experience is outstanding.
Given that it took LedgerX more than five years to get to this point, they could be forgiven for wanting to shake off the leash and get running, but, in the words of LedgerX themselves, “…we had better make sure that we get it right, and make sure customers are safe.” 2019 is still looking like a feasible start date for the product however, which will please everyone concerned, especially Bitcoin fans.