LedgerX announced the launch of the first physically-backed, fully-regulated Bitcoin exchange Wednesday, a little over a month since they were awarded a futures license by the Commodity Futures Trading Commission (CFTC), but it comes with a hefty entry fee. The introduction of Omni means that LedgerX has easily beaten the much-vaunted competitor Bakkt, which is yet to gain a license, and ErisX, the only other platform to have been given the green light. It means that US residents can now trade futures contracts for real Bitcoin, a move that goes some way to alleviating the lack of legal access to platforms such as BitMEX.
Physically Backed and Fee Free
LedgerX initially announced the Omni platform in April, since when they have clearly been beavering away behind the scenes, confident in the awarding of their license, which they duly got at the end of June. This has allowed them to finalize an already well-developed platform and announce a waiting list for what they have called the “most exciting product we have worked on”. According to LedgerX, Omni will be “the simplest way for any retail customer…anywhere in the United States and Singapore to have one central place for USD/BTC custody, Bitcoin trading, options trading, and futures trading.”
In addition to USD, users can deposit and withdraw BTC into their accounts, with all contracts crucially being physically settled. The platform will also be fee-free for regular users, with market makers paying all the exchange fees, which makes a change from most other exchanges.
Steep Entry Fee Will Price Out Many
Despite the positivity emanating from the announcement, and rightly so, one negative element does seem to have slipped under the radar. Back in April, LedgerX pitched Omni as being an offering for the everyday customer, stating that “we always knew retail would be the next step after proving our institutional offering” and that the intent of their institutional products was “not to turn away customers”.
While the above presents very noble ideals, anyone looking to register with Omni is faced with a $10,000 or 1BTC minimum deposit, which will have the immediate impact of turning away customers. In fairness this may have been at the behest of the CTFC, and it’s obvious why LedgerX didn’t announce this fact, but it is a shame that many of the retail investors they were so keen to get on board earlier in the year will now be priced out of the platform after making such claims.