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CoinFLEX (Formerly CoinfloorEX) to Offer Physical Futures Contracts for Bitcoin, BCH and Ethereum
The cryptocurrency exchange CoinfloorEX will start to offer futures contracts for Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH). All of them will be able to be leveraged up to 20 times. The information was released by Mark Lamb, one of the co-founders of Coinfloor, during a conversation with Bloomberg on January 6.
The market is becoming increasingly prepared to receive institutional and larger investors. There are a few companies that are already working in order to offer physically delivered Bitcoin futures. Perhaps, one of the most important companies in the space trying to offer these services for investors is the Intercontinental Exchange (ICE) the parent company of the New York Stock Exchange.
CoinfloorEX will now be called Coin Futures and Lending Exchange (CoinFLEX). The firm is owned by a consortium that includes Roger Ver and Trading Technologies International Inc. These develop trading software for brokers and money managers.
This would allow CoinFLEX to challenge companies such as BitMEX, one of the largest companies in the cryptocurrency space. CoinFLEX’s futures are going to be physically-delivered compared to the services currently offered by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME), that are cash-settled.
Lamb Commented about crypto derivatives during the interview:
“Crypto derivatives could become an order of magnitude larger than spot markets and the main thing that’s holding back that growth is the lack of physical delivery. Volumes are reduced because of a problem of trust when it comes to cash-settled trades.”
According to Lamb, the daily volume of trading in the underlying crypto market is equal to that in derivatives, close to $3 billion. However, there is plenty of room in the futures market for them to grow in the future.
The ICE will also be a strong competitor for CoinFLEX. The ICE has been promoting its Bakkt platform since August 2018 and it has attracted the attention of the whole crypto space and other companies such as Microsoft or Starbucks.
CoinFLEX will also be paying attention to Tether (USDT), one of the most popular stablecoins in the market. The contracts offered by CoinFLEX will be traded against Tether. There will also be a contract that will trade Tether against the USD Coin (USDC), another stablecoin in the market.
Although there have been several controversies regarding Tether and its sustainability, the stablecoin has one of the highest volume levels in the market.
As CoinFLEX has also been backed by Roger Ver, it will become the largest venue for trading Bitcoin Cash derivative. Roger Ver supported Bitcoin at the very beginning but it then moved towards Bitcoin Cash, offering on-chain scaling solution for Bitcoin. Other CoinFLEX backers were Amber AI Group and Mike Komaransky.
CoinFLEX will be located in Seychelles, that has very light regulations around digital currencies and blockchain technology. As Lamb explains, being offshore maximizes the accessibility and trust that traders place on them.