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CoinfloorEX, founded last year as a unit of Coinfloor based in London, the oldest British Bitcoin exchange, will be re-launched in February as a spin-off and will be renamed as CoinFLEX (Coin Futures and Lending Exchange). Domiciled in Hong Kong, the new exchange is physically launching cryptocurrency futures.
Derivatives, which offer up to 20 times leverage, will be available next month on the target market: Asian retail investors.
In an interview with Bloomberg, CoinFLEX CEO Mark Lamb says the platform will offer futures for Bitcoin, Ethereum and Bitcoin Cash.
The introduction of the new exchange could attract the incoming cryptocurrency platforms, Bakkt and ErisX, projects that have been at the forefront of the bid to offer physically resolved Bitcoin futures. Announced in August last year, Bakkt is a new Bitcoin platform that will allow consumers and institutional investors to buy, sell, store and spend cryptocurrencies. It also expects to offer physically established Bitcoin futures.
Announced in October of last year, ErisX plans to launch a derivatives exchange and a clearing organization that brings together futures and digital spot contracts on a single, fully regulated platform.
Both Bakkt and ErisX, strongly supported by the main Wall Street investors, should be launched in the first half of 2019, pending further developments and regulatory approval.
In addition to these platforms, CoinFLEX will challenge BitMEX, the largest exchange of encrypted futures in the world. Also based in Hong Kong, BitMEX has maintained a huge advantage among traders, as it offers 100 times leverage on various fixed-term contracts.
Dice Lamb,
"I've been in the market for six years, so seeing this kind of 80% correction is not really new." Crypto break-in cycles can last a long time, but ultimately, this is a class of activity that is a of the most fascinating, volatile – which is great for traders – goods in the world, and it's really exciting because it has the potential to become one of the major currencies in this world. "
Lamb explains why he believes his company's physically established futures have an advantage over their competitors.
"If you are negotiating a cash-settled future, you are open to manipulation of the index at the time of settlement If you are a market maker where you are doing basic trading, where you are arbitrating the cash and spot markets, the cash markets compared to the futures market, what you really want to be sure is, at the time of expiry, you know exactly what you'll get …
"With a physically delivered future, it really binds the price of the real active future, because when it expires, everyone knows what they will get in. Anyone who is short, Bitcoin delivery, gets money Anyone who is long, delivers money, receives Bitcoin. So this kind of connection with the real world allows us to use these types of future for something more than just speculation, they are good speculative tools, but they become useful for commercial coverage, miners' exposure coverage, coverage and OTC trade or the creation of markets ".
Lamb believes that Asian cryptic futures trading will continue to dominate the space, while US players, such as Bakkt and ErisX, contend for US regulators.
"We believe it is likely to continue because the United States is trying to repress the leverage offered by these futures and also the time duration offered by these futures contracts."
He says it's not what traders want.
"If you're trying to tackle a global audience compared to a country or region, it's a very different image." If you end up being regulated by a regulator or a jurisdiction, or a nation, you're actually limiting the amount exposure and the amount of awareness you can get to the rest of the global audience, so we're really excited to be an exchange of encrypted global derivatives, broad and scalable, and for this approach you have to be on the open sea. "
CoinFLEX is owned and operated by the first Bitcoin investor and Bitcoin Cash backer Roger Ver, Trading Technologies, Mike Komaransky, Dragonfly Capital Partners, Global Advisors, B2C2, Amber AI, Grapefruit Trading and Alameda Research. According to the announcement, the consortium plans to meet "the market demand for a global, scalable and secure encrypted futures exchange".
The new exchange will also introduce the world's first contract for the sttecoin-to-stablecoin, offering Tether (USDT) against Circle's USD Coin (USDC). Linked to the US dollar, stablecoins allow traders and investors to operate quickly and efficiently on global cryptocurrency markets without the need for bank wires that can slow down transactions and trade.
Coinfloor will maintain a shareholding in CoinFLEX.
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Disclaimer: the opinions expressed in The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and operations are at your own risk and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of any cryptocurrency or digital assets, nor The Daily Hodl is an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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