Coinfloor have announced their group of cryptocurrency exchanges will now include Coinfloorex, a bitcoin futures exchange. Offering "institutional grade risk management and governance," traders, hedge funds, and miners will get bitcoin futures "at scale" through "specifically designed cryptocurrency contracts and operational controls."
"Our mission is to build a bridge between Fiat currency and cryptocurrency," Obi Nwosu, CEO of Coinfloor stressed, "to drive the stability and sustainability of cryptocurrency. Numerous market participants are calling on existing cryptocurrency exchanges that provide futures contracts to switch from cash to physical settlement. However, making that transition will be very difficult for them to achieve. We understood this requirement from the start, and have worked for over two years to bring this functionality to market. Now, institutional investors and traders can capitalise on market dynamics, within their own risk parameters and in line with their individual trading strategies."
As such, Coinfloor claims to have launched the "first physically delivered cryptocurrency futures contract" through its newly created crypto exchange, Coinfloorex. The contracts were "created to protect investors and traders against price slippage on positions at time of settlement, as well as concerns of market manipulation."
The company is well-known in the ecosystem, having been around since early 2013, using a peer-to-peer crypto exchange model. Bitcoin vetted brokers are connected to investors in bitcoin. Using a local bank, buyers are able to send money directly to sellers. They were also an early adopter of solving the normal two-step conversion between fiat and bitcoin. Coinfloor was one of the first to try a no-fee trading model, but later reinstated fees at the end of last year. It also continues to play an active role in courting regulators to take crypto seriously.
The innovation this time around seems to be the "physical delivery" aspect of bitcoin futures. "Settlement is based on physical delivery rather than an index price from across other exchanges, which provides maximum pricing transparency. Access to Coinfloor's spot exchange enables investors to easily convert Bitcoin to Fiat currency post-physical delivery, creating opportunities for longer-term currency appreciation or through meeting Bitcoin-denominated obligations," the company explained.
Bitcoin Futures Launch in the UK
For any crypto exchange, hacking is an issue. Anticipating such worries, "Security of the exchange is underscored by 100% multi-signature cold storage cryptocurrency custody
facility, safeguarding client portfolios from theft, loss or other security issues associated with partially online or online only storage of assets. Coinfloor also provides monthly solvency audits of Bitcoin balances, which gives institutional investors assurance that Coinfloorex has sufficient Bitcoin liquidity to manage market fluctuation," the announcement explained.
Ultimately the product is aimed at more savvy "sophisticated investors." April of this year is the date physical delivery of the bitcoin futures contract (XBT) is to be made
