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Crypto Exchange Bitnomial to launch Bitcoin Derivative Exchange

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Jayashree Ingle

CBW -External Analyst

INDIA

Sep, 29 2020

Sep, 29 2020

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Highlights 

  • The CFTC grants approval for Binomial’s Bitcoin Derivative Exchange
  • Initial products will be Bitcoin future, Mini Bitcoin future and Bitcoin options
  • Contracts will be physically delivered through Bitcoins instead of Cash-settled contracts.

After a long wait, the US Commodity Futures Trading Commission (CFTC) has permitted Bitnomial Exchange to launch a Bitcoin Derivative Exchange. As per the reports, the User-acceptance Testing is in the final phase and the platform is all set to launch on April 27 of this month.

The contracts will be physically delivered instead of Cash-settled contracts on this platform which implies that the customers can get Bitcoins instead of cash after the expiry of the contract.  

Bitnomial has applied for the license back in 2016 which took four years for the CFTC to grant this approval.   

As per the CFTC, Bitnomial has been designated to operate as a Contract Market. Bitnomial will be the first exchange to offer Bitcoin futures and options products following the Bakkt, CME, ErisX, Cboe, and LedgerX.

Bitnomial CEO Luke Hoersten informed that the initial products -Bitcoin futures, Mini Bitcoin futures, and Bitcoin options will be available for trading after the future curve stabilizes. The trading will be subject to "customer readiness" after the launch.

CEO Hoersten said, “We are building Bitcoin product complex, a suite of interrelated financial products, starting with quarterly Bitcoin futures, micro futures and options. Additionally, our products initially trade on 37 percent and are settled on-chain instead of book entry.”

Luke Hoersten wants to democratize the Bitcoin but intends to take a different path from CME and Cboe to materialize his plans.  

Bitnomial’s long wait for approval as Designated Contract Market 

Chicago based Bitnomial Exchange had been founded in 2014. Two years after the formation, Bitnomial had applied for the CFTC permission for the Designated Contract Market for deliverable crypto-asset derivatives.

The Exchange is supported by $7.5 million funding from notable investors including the Coinbase Ventures, Jump Capital, DV Chain, Digital Currency Group, ValueStream Ventures, RRE Ventures, and Indicator Fund among several others.


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Jayashree Ingle

CBW - External Analyst

INDIA

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