Cryptocurrency Derivatives Series: LedgerX obtains CFTC’s approval for bitcoin futures but can it really play role of Bakkt’s counterpart?

The Commodity Futures Trading Commission (CFTC) has approved crypto firm LedgerX to offer physically settled bitcoin futures contracts.

LedgerX is a US-regulated trading platform for physically-settled digital currency derivatives. Their management team comprises Goldman Sachs, MIT, and CFTC alumni, who bring-in financial expertise, tech-savvies and regulatory experience to the firm.

And now the CFTC clarified the news on Tuesday in their press release about the approval of LedgerX’s application for a designated contract market (DCM) license, implying the company is now enabled to offer the new futures contracts. 

They are now the second company to obtain the approval from CFTC to offer physically settled bitcoin futures; other predominant names, such as Intercontinental Exchange’s Bakkt, Seed CX and ErisX are also intending to penetrate this crypto derivatives market. 

LedgerX has also confirmed the news and they seem to be focusing on their targeted area which is retail clients, whereas Bakkt’s own futures contracts have been self-certified, the firm is waiting for the New York Department of Financial Services to license its warehouse) and they are likely to lure institutional inflow. The new cryptocurrency start-up, ‘Bakkt’ established by the Intercontinental Exchange (ICE), was all set to launch bitcoin futures contracts with physically delivery facilities. 

Well, the objective is to offer new tracks especially for both institutional clients and retail traders to make access for cryptocurrency trading. 

Kelly Loeffler, the CEO mentions “as we work through regulatory approvals, we are mindful that the infrastructure we are building has the potential to create more opportunities for digital assets to grow in relevance and trust — by being more secure, investible and useful. 

As a former marathoner, this point in time recalls the stage in the training regimen when you’re putting in long runs with your training team. Race day is approaching, and there is more work to be done. I’m proud to be going the distance with this growing team and of the culture we are building while bringing digital assets into the mainstream economy.”

The Intercontinental Exchange appears to be on a quest to make Bitcoin investing easier for institutional clients.

Amid all these developments, the bullish steaks of the underlying security bitcoin trading have been commendable, BTCUSD has surpassed $12.5k mark on Bitfinex exchange (which is mammoth returns of 313 in percentage terms that too within a span of 6 months or so).

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards 12 levels (which is mildly bullish), USD is at -78 (highly bearish), while articulating (at 08:06 GMT). 

For more details on the index, please refer below weblink:

By Niranjan Patil
  • Market Data

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