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LedgerX beats Bakkt and ErisX, first company to offer physically-settled Bitcoin futures

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Bitcoin derivatives provider LedgerX became the first company to offer physical Bitcoin futures trading after securing a CFTC license last month. The company announced the news on July 31, saying all retail customers based in the U.S. will be able to trade the new product on the Omni platform.

Physically settled Bitcoin futures finally available in the U.S.

A vacant space in the U.S. crypto trading market has just been filled, as physical Bitcoin futures trading has become available to retail and institutional investors in the country. LedgerX, a crypto trading company focused on Bitcoin derivatives trading, announced that it has launched the first physically-settled Bitcoin futures in the U.S.

The company filed for the requisite licenses with the U.S. Commodity Futures Trading Commission (CFTC) back in November last year and originally planned to launch Bitcoin futures in April. However, they were granted a designated contract market (DCM) license in late June and have been conducting user acceptance tests throughout the month.

Paul Chou, the CEO of LedgerX, said that retail customers can trade the product using the recently launched Omni platform. Institutional investors will be able to trade futures alongside all other LedgerX projects, he added.

Chou also said that this is the first time a CFTC-regulated company has enabled Bitcoin deposits as collateral for a contract.

“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,” he said. “Cash-settled is cash-in and cash-out, we’re Bitcoin-in and Bitcoin-out.”

LedgerX brings more people into Bitcoin

LedgerX has made history by introducing its retail-oriented physically-settled futures contracts. For the first time ever, customers don’t have to depend on the U.S. banking system when trading cryptocurrencies. As Bitcoin is used as collateral, the contract can be settled at any time. This, Chou said, will enable LedgerX’s customers to trade Bitcoin 24 hours a day, 7 days a week, and 365 days a year.

Apart from giving traders more freedom, the company’s newest product will also be less susceptible to manipulation. John Todaro, the director of research at TradeBlock, said that the cost usually associated with physically-settled contracts disappear with Bitcoin and could be more attractive to non-speculative institutions.

Chou also said that LedgerX has spent the better part of this year educating regulators about crypto derivatives, which means that more DCM licenses could be granted soon. Bakkt is currently waiting on a trusted charter from the New York Department of Financial services before it can be launched. ErisX has already received all of the necessary CFTC approvals but is yet to announce the launch of its futures contracts.

Filed Under: , Adoption, Bitcoin

Priyeshu Garg

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in Computer Science Engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving the transportation problems at his company, he can be found writing about the blockchain or roller skating with his friends.

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