London-based Coinfloor Crypto Exchange To Venture Into Bitcoin Futures Market

A UK-based cryptocurrency exchange called Coinfloor which has its headquarters in London has announced that it plans to introduce Bitcoin futures contracts.

The London-based digital currency exchange kicked off its operations in 2013 and it announced on Wednesday that it wants to enhance its platform by introducing bitcoin futures contracts in April. The move will make Coinfloor the latest crypto exchange to introduce such an option for its customers. However, the upcoming offering from Coinfloor will be notably different from what rival exchanges are offering. This is because the London-based cryptocurrency exchange will be offering physically settled bitcoin futures contracts.

The idea behind Coinfloor’s upcoming offer is that the actual asset will be delivered when a contract is scheduled to expire which in this case Bitcoin will be the involved asset. CBOE and CME also offer Bitcoin futures contracts but their options do not include the delivery of bitcoin to the owners of the contracts. Mark Lamb, one of the founders of Coinfloor told Reuters that the exchange is planning to launch the new product in response to the demand from some of its customers.

In his statement, Lamb noted that: "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."

Coinfloor will join the ranks of CBOE, CME Group, CryptoFacilities and Bitmex which have also ventured into the Bitcoin futures market. Meanwhile, the idea of Bitcoin futures is still considered a sensitive matter. The U.S. Commodity Futures Trading Commission recently announced that it would launch a comprehensive review on futures trading, especially for cryptocurrency. This is because most of the large investors and proprietary funds have expressed concerns about the high likelihood of the cash-settled process being manipulated by people with a malicious intent.

Several senators have also called on more investigations and regulations on Bitcoin futures markets as part of their push towards the protection of taxpayers from fraudulent practices and manipulation within the futures market. This suggests that there will most likely be heavy demand for regulation in the bitcoin futures market. Meanwhile, Coinfloor’s plan to launch the service in April highlights yet another major milestone for the exchange especially as it strives to attract more customers and to become one of the leading cryptocurrency exchanges.