Physical Bitcoin Futures Contracts Will be Standard Soon Says Coinfloor’s Mark Lamb
Can BTC Futures Contracts Be The Norm? Coinfloor Co-Founder Thinks So
Market manipulation is a very important topic in the cryptocurrency world. Even when there is no manipulation in the market right now, the threat of it is always present. Indeed, the United States Securities and Exchange Commission (SEC), rejected one of the most important Bitcoin exchange traded fund (ETF) applications.
One of the main factors behind the decision taken by the SEC was the fact that the markets could be manipulated in a very easy way. Additionally, institutional investors and other wealthy players decided to stay away from virtual currencies in order to avoid manipulation schemes.
At the moment, there are different technological solutions being developed that aim to combat market manipulation in the crypto space. Coinfloor wants to reduce the risk of market manipulation and create a clear and regulated environment for institutions to invest in the crypto space. Coinfloor is currently using a blend of machine learning surveillance technology and a physical delivery of futures contracts.
Mark Lamb, Coinfloor co-founder and head of liquidity, commented on the matter:
“Market manipulation can take many forms. this makes it an incredibly time-intensive problem to tackle manually, using human judgement alone.”
But an important number of tools are being used in order to identify the problem and how it originates. he intention is to use the latest technologies in order to monitor user patterns and spot strange or manipulative behaviours.
The company is working in a cryptocurrency exchange known as CoinfloorEX and will be available to Trading Technologies’ users to trade securely and participate in the crypto market. The company believes that they will benefit from new users and create more liquidity in the market for institutions.
Moreover, the company will be implementing Trading Technologies TT Score machine learning surveillance technology in a wide variety of exchanges. Users trading in these platforms will be protected against manipulation in the market.
“Trading Technologies is the largest trading platform and software provider in the futures industry,” they have informed. “Plugging the Trading Technologies platform into CoinfloorEX will allow professional traders in the traditional future smarket to easily see CoinfloorEX’s market data, open an account with CoinfloorEX, and then trade our physically delivered bitcoin futures through the Trading Technologies’ software and user interface.”
Of course, in order to offer physical solutions, the time of processing contracts trading would increase, but it does not seem to be a problem for Mark. He said that the benefits outweigh the time taken for the extra step. Indeed, futures contracts will have a higher confidence and reduced uncertainty of physically delivered contracts.
Market makers that enter the cryptocurrency world will also have benefits. Due to the fact that market making is a low margin, high precision business, physical delivery will protect them from the impact of manipulation or liquidity issues.
As Mark says, this will benefit the network as a whole because attracting institutional trading volumes moved into Bitcoin will help reduce price volatility and accelerate the potential for consumer use as a currency. In the long term, this will have an impact in the society and in the way people considers money.
In Mark’s words, in a similar way to FX commodities, treasures and other traditional futures market, in some time physically delivered cryptocurrency futures will become the norm.