Wanna trade Bitcoin options? We just got one step closer...
The U.S. Commodity Futures Trading Commission (CFTC) just announced that LedgerX has been granted official status as a Swap Execution Facility (SEF).
This was a surprising development for many and represents a major hurdle cleared for LedgerX.
This is puts LedgerX well on it's way to becoming the first ever federally recognized exchange with the ability to trade Bitcoin option contracts.
Yes, you read that right, this news is paving the way for Bitcoin options trading for the masses.
The SEF status designation puts LedgerX on a list of only 25 financial institutions with SEF approval, a list which includes heavy weights like Bloomberg and the Chicago Mercantile Exchange.
Although this news represents a major hurdle cleared for LedgerX, it doesn't represent the final hurdle in the process...
What's next?
The next step is for LedgerX to get approval from the CFTC as a Derivatives Clearing Organization, or (DCO).
That is the big one.
If/once that happens, LedgerX would be the first ever federally regulated Bitcoin options exchange and clearinghouse to list and clear fully-collateralized, physically-settled Bitcoin options.
What changed?
Up until now, LedgerX wasn't able to gain approval because it didn't have the capital required to qualify.
However, after raising roughly $11.4 million in May, LedgerX has now garnered enough support to fully collateralize it's trades.
CEO of LedgerX, Paul Chou, had this to say at the time regarding the fund raising:
"These investments will help further our application to become a regulated exchange and clearinghouse for Bitcoin options."
So far, he was exactly right as LedgerX gained SEF status and is well on it's way to gaining DCO status.
What does this all mean?
This is another step in bringing Bitcoin and cryptocurrencies to the masses.
Some are strongly against any kind of regulation on Bitcoin and the crypto market, but in order to get institutional type money invested in the space there needs to be at least some sort of regulation of the market.
The big question is....
What will a derivatives market for Bitcoin (and eventually other cryptocurrencies) do to their prices?
Let me know what you think in the comments section below.
Stay informed my friends!
Sources:
https://news.bitcoin.com/ledgerx-receives-approval-regulated-bitcoin-swap-exchange/
Image Sources:
https://news.bitcoin.com/ledgerx-receives-approval-regulated-bitcoin-swap-exchange/
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This is very bullish for the crypto currency industry! @jrcornel you asked what it will this do for the prices? I think it will drive them up with the increase in capital entering the market mate.
I am very happy to hear this because trading crypto options will be very, VERY profitable
Profitable for whom? LOL For the banks, yes. For us, not so much.
This is a nice recap and good news for everyone on here - when the water rises, all the boats on the ocean float upwards. The more involvement there is in blockchain, the greater demand and the greater utility. Nice post
The more adoption of the blockchain technology, the better. more people getting into the trading without really knowing what it is, am not sure what it could potentially impact the price.
+1. This could be good, it could be bad.
But all in all, I am pretty sure that if this thing gets rolling, its going to be good for all of us!
Extra leverage through derivatives is probably for the ones with steel nerves :-)
But it might be a good way to hedge the downside risk. Although I wonder how many people really have the balls to write heavily on put options :-)
Good post and great information, Thanks
This comment has received a 0.14 % upvote from @booster thanks to: @hamzaoui.
Embrace the POWER!!! of the Bitcoin!!! : p
gread educative post, thanks for sharing bro
Will this make bitcoin manipulated lower?
It may not have an immediate impact, but it will give the globalist banking cartel a means with which to suppress the price of BTC, yes.
Anything a centralized government touches turns to garbage, this is a proven method that has happened over and over again! All they want is power and they see the potential power in bitcoin so they want it! If we as humans can learn to not be governed then this would be a step in the right direction, but it really is as though people want to be told what to do. I swear if all these governments get control of bitcoin it will be no different then any other currency! I may not know exactly what I am talking about but I just have lost all faith in any government system!
Wow ! This is a great news. Basically the value of bitcoin is mostly depends on how many people are aware, and attending this area. The more investing option we have, the more value we will have.
educative post. It might be a good way to hedge the downside risk. Although I wonder how many people really have the balls to write heavily on put options
I am sure there will be a lot of premium :)