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Futures

LedgerX looks to join bitcoin futures party as it makes a big push towards retail

Quick Take

  • LedgerX is looking to offer physically-delivered bitcoin futures
  • It’s part of the firm’s push into retail crypto trading

LedgerX is looking to dive into the market for physically-delivered futures as it makes a big push into retail crypto trading.

In an interview with The Block, LedgerX co-founder Juthica Chou said the firm, which is better known for supporting the trading of options tied to bitcoin, submitted a request for a designated contract market license from regulators, which would allow it to offer the new bitcoin futures product. The announcement comes after a slew of other trading firms have announced similar products, such as Bakkt, ErisX, Seed CX, and CoinFLEX. 

In the trading of physically-delivered futures, customers are paid out in bitcoin at the expiration of a contract, whereas cash settled futures pay out in USD. CME Group offers a cash-settled product. In November, LedgerX filed for the necessary license to offer the product to retail clients and it is currently speaking to regulators.

The new futures product is part of a broader retail push for the firm via a new platform, dubbed Omni. The new platform will support trading of futures, swaps, and options for retail users. In recent months, LedgerX has shifted its strategy away from large investors and bulge bracket banks. 

“I think at this current time we don’t see the demand growing among really large institutions and banks. We are still a $85 billion market cap for bitcoin — really just the size of a large stock,” Chou said. “Right now we see the opportunity towards the other end of the spectrum.”

The firm counts over 200 institutions as clients for its physically-delivered swaps product. As for the future product it plans to support, Chou said the firm has an advantage over its rivals inasmuch as its been trading similar products longer than anyone else. 

“We’ve been doing LedgerX since 2014 … tons of people have announced plans to do this but ultimately we are the only ones that have done it,” she said.