Ethereum

LedgerX is ready to launch options for ether

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Quick Take

  • LedgerX, the cryptocurrency derivatives trading platform, is ready to launch ether futures
  • The firm is waiting for the green light from regulators
  • Elsewhere, Cboe is telling market makers it is ready to launch ether futures

Traders may soon have a new way to bet on ether, the second-largest cryptocurrency by market capitalization.

LedgerX, the crypto trading platform known for its bitcoin swaps and options, has an options product tied to ether ready to go live, according to a source familiar with the firm’s business.

The company, however, is waiting for regulators from the Commodities Futures and Trading Commission to get comfortable with the product before making it available to its clients. The source told The Block that approval could come after a regulatory meeting October 5.

LedgerX, which launched in 2012, was founded by Paul Chou, a former Goldman Sachs trader. The firm has on-boarded billion-dollar hedge funds, family offices, and other institutional investors since it kicked off its options and swaps trading businesses for bitcoin in October 2017.

Still, it has not been able to lure a bulge bracket bank akin to the likes of Goldman Sachs or Morgan Stanley, according to a source.

In equities and cryptocurrency markets, such products provides investors the option, hence the name, to purchase an asset at a set price in the future. It also provides a way to hedge a bet in an underlying market.

As such, an option for ether could make it a more attractive investment for an asset-manager or trader, potentially providing a tailwind for the crypto’s price.

Ethereum has suffered over the course of the past month as bears have stormed the market, slashing more than 20% of its price from the beginning of September to the time of print. On September 21, Ripple’s XRP briefly surpassed ether by market capitalization, per data from CoinMarketCap.

At last check ether was trading at $230 a token.

Elsewhere, Cboe Global Markets, the exchange operator behind one of the first markets for bitcoin futures, is also trying to get a futures product off the ground for ether. Notably, the exchange launched bitcoin futures in December 2017.

As Business Insider reported earlier in September, the Chicago-based exchange was telling market-making firms its product was ready. Similarly to LedgerX, the firm is waiting for regulators to get comfortable with the product prior to launch.

In December 2017, Cboe president Chris Concannon said the exchange would expand its suite of cryptocurrency products to include futures for ether and bitcoin cash.