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/
Follow me: @jrcornel
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 :)
True Flip {ICO} - Already running a transparent blockchain lottery! Bomb! Bonus 20%! Hurry! :)
The platform is already working and making a profit :)
https://steemit.com/ico/@happycoin/true-flip-ico-already-running-a-transparent-blockchain-lottery-bomb-bonus-20-hurry
Onwards and upwards, thanks for the information @jrcornel. Upvoted and followed.
Wow, what good news. Bah to all the government regulators in the first place. But it's nice to see we are making it through the hoops anyway!!
@jrcornel thanks for sharing!! We need to read this one article.
This summer lull in bitcoin should come to an end soon,then we can see it sore to new heights. Is $5k too low of an estimate?
I'm thinking $3000 by summer's end and $5000 by the end of the year.
It will be interesting to see where this goes. Especially if they get approval from the derivatives office. I would like to think that giving more people access to trading Bitcoin or any crypto coins would bring an increase in price and a reduction in volatility. I wonder what the experts would say.
Once these coins are legitimized by major companies and by the government, billions will pour into the market and people will become richer than they ever could have imagined overnight
I came here to steemit recently as a way to get exposure for my message which is in the weight loss and health niche. Instead, I find myself struggling to understand crypto in all its complexity.
With the addition of atms and cc's to spend this money, I think other old ladies like me will soon jump in. It's not like the regular economy is booming.
This seems to be the place for people who are forward thinking. Getting accepted into major exchanges should help offer more legitimacy for those who are on the fence.
But the atms will get the little un-knowledgeable people like me :)
I think bitcoin is not stable enough yet.
I'd feel a lot better is it wasn't designated a derivative. I'm also concerned how it will affect the blockchain... being that blockchain is pretty much unregulatable. Will that have to be changed to accomodate govt. regulation?
Also, WHEN is SBD going to go back up... I'm getting killed over here!
Exciting times! Thanks for the share
I wonder if that will enable us to do option spreads and other strategies that we can use on equity options.
thanks a lot for this helpful post thanks for sharing and keep on posting ;)
No
That's awesome!
This is great news and educative as well. Thanks @jrcornel
Free Byteball tokens are being offered for Bitcoin holders !
Can't see it being anything but positive for BTC. Items like this are also the reason that BTC will remain the lead crypto for sometime whether it's the best or not. It is clearly the conduit to the mainstream.....once established then other cryptos may be able to take over as the de facto coin
Good news!! Let's see if the demand=))
I smell a bubble.
Upvoted (already following); very interesting news! I don't think BTC will follow GLD and SLV down the "captured" path, but I could be wrong...
Its a necessary evil if bitcoin wants to go mainstream. Lets see what the derivates / cfd market can do for #btc price.
This is great news for the whole community, and for the world.
We're coming closer and closer to mainstream adoption. These are great times!
Great read! Thanks mate
Shouldn't derivatives stabilize prices making it easier for people to pay for stuff with digital currency without worrying about being upside down on value when it settles. They could also take forward cover on long term contracts too.
This is bitcoin!
Great share! @jrcornel . And for anyone who is relatively new to the whole cryptocurrency thing and steemit aswell, like myself, there is a brief that I have compiled and shared on my profile https://steemit.com/bitcoin/@alexkoshy/bitcoin-could-be-the-new-gold
I would appreciate if the people who already know about the concept check it out and give me an insight on possible edits that could help new joiners!
Please follow & leave an Upvote, Thank you for your interest!
This is very good news for bitcoin traders . Good decision by U.S. Commodity Futures Trading Commission (CFTC).
Wow, don't know how I missed this! That could crush the premium on GBTC. Could also drum a lot of attention from bigger investors.
this is good news have you heard of an ico called dcorp I think they do something simmalar with all that stuff futures and deriveties
Bitcoin is always going to be one of the best performing cryptocurrencies in the future to trade. Check out my blog for a guide for the best Bitcoin trading strategies in terms of timing since there's a lot of volatility due to the hard fork.
https://wikicrypto.com/how-to-trade-bitcoin/