Coinfloor, a group of cryptocurrency exchanges targeting institutional and sophisticated retail traders, has launched CoinfloorEX – a cryptocurrency futures exchange.
CoinfloorEX will offer for the first time ever physically delivered cryptocurrency futures contracts, which the firm says will protect investors and traders against price slippage on positions at time of settlement, as well as allay concerns of market manipulation.
“The cash settled futures have been around since 2011 and so far they haven’t succeeded very much. When you talk to the institutional players they all want physically delivered futures,” says Mark Lamb, co-founder of Coinfloor.
He adds: “With the cash settled futures the institutional market participants are afraid of market manipulation at the time of settlement – so manipulation of the settlement price through the underlying spot exchanges – and with physical futures that’s not a possibility because you’re not getting the differential between the price you traded at and the settlement price, you’re just getting the physical coin.”
Security of the CoinfloorEX is underscored by 100% multi-signature cold storage cryptocurrency custody facility, designed to safeguard 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 aims to give institutional investors assurance that CoinfloorEX has sufficient bitcoin liquidity to manage market fluctuation.
The first physically delivered contract will be launching in April 2018 and will be for physical delivery of Bitcoin (XBT).
Obi Nwosu, CEO of Coinfloor, comments: “Our mission is to build a bridge between Fiat currency and cryptocurrency 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”.