Cryptocurrency Exchange, CoinFLEX, Set To Offer Physical Bitcoin Futures To Asian Investors

In the cryptocurrency industry, Bitcoin Futures has gained a reputation as the most closely watched product of all derivatives. Many players in the industry are trying to tap into the Futures market to benefit from it while the hype is still on. Last year, the New York Stock Exchange announced that it would be offering Bitcoin Futures contracts this year. Eris Exchange LLC also made a similar announcement. Eris Exchange plans to offer virtual derivatives for the largest cryptocurrencies in the market.

CoinFLEX, a cryptocurrency exchange that was cut out from a unit of Coinfloor last year, has also announced that it would be rebranded as Coin Futures and Lending Exchange. The cryptocurrency exchange, which will also be called CoinFLEX, is owned by some of the most prominent members of the cryptocurrency community including Roger Ver, and key members of Trading Technologies International Inc. The co-founder of Coinfloor, Mark Lamb, will also be the chief executive officer of this new venture. CoinFLEX will offer futures contracts on BTC, ETH and BCH.

These futures can be leveraged as much as 20 times. This exchange is going to present strong competition for platforms like BitMEX. This is because BitMEX is in control of a large chuck of the Asian market share. This exchange by Arthur Hayes provides up to 100 times leverage on its futures contracts. The difference between the products by CoinFLEX and other products is that they will be physically-delivered according to Lamb. So, when they expire, owners will be handed the underlying cryptocurrency and not cash. This feature will give CoinFLEX an edge over other exchanges because cash payments of futures products are prone to manipulation. In Lamb’s words:

“Cryptocurrency derivatives may eventually become an order of magnitude that will be larger than spot markets. The only thing holding it back is the unavailability of physically deliverable products. This reduces trading volumes as well as trust in the market when it’s time for cash trades.”

The trading volume for the entire cryptocurrency market typically ranges from $3 to $5 billion on a daily basis. Futures volume in other markets can be 20x more. This leaves enough room for growth in the futures market as far as digital assets are concerned.

To bring its plan to life, CoinFLEX will have to meet up with the New York Stock Exchange which is planning to release its futures contract, Bakkt, in the first quarter of this year. The company will have to convince the public that it’s product is better than Bakkt and other futures product in the market.

Lamb said that CoinFLEX is going to pair its contracts against the most dominant stablecoin in the industry, Tether. So, when a contract expires with shorts and Bitcoin is delivered, the owner will receive Tether (USDT) tokens. When the contract expires with longs, the owner will receive BTC tokens. This is not something you can enjoy with cash settled contracts.

CoinFLEX also announced that it would be introducing a contract that will paired Tether against USD Coin. USD Coin is a dollar pegged coin by Circle, and Coinbase. Lamb added:“Of all the stablecoins, Tether has the highest volume and liquidity. Since the accusations against Tether have been resolved, we are fully confident in using it.”