LedgerX prices Bitcoin futures at $10,000

Posted: 20 November 2017 12:03 pm
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The global cryptocurrency has been on a tear lately, rising around 60% in a little over two months.

For the first time, bitcoin’s value exceeded $8,000 this weekend. Additionally, clearing and trading startup LedgerX matched a trade on its platform in what it claims to be the first-ever bitcoin futures call in history.

The Long-Term Equity Anticipation Security (LEAPS) trade was matched by the platform on Saturday November 18 and is due to expire on December 28, 2018. It was for a $10,000 strike, traded at $2,250.25.

This means the buyer has the option to purchase bitcoin at a price of $10,000 on that date. That’s almost a 25% increase on the digital currency’s current price of $8,211, according to coindesk’s updated Bitcoin Price Index.

LedgerX calculates that there is about a 25% chance Bitcoin will be above $10,000 by the end of next year.

LedgerX chief executive Paul Chou Chou told coindesk that what makes a LEAPS trade different to a regular futures trade is that if bitcoin’s price falls to zero, there’s no obligation on the trader to buy the currency.

“But if a year from now it’s at $20,000, then you can exercise your options,” Chou said.

The globally-recognised cryptocurrency has been on a tear lately, rising around 60% in a little over two months. The digital currency broke the $5,000 barrier in early September, propelling the total value of publicly traded cryptocurrencies – including bitcoin, Bitcoin Cash and Ethereum – to more than $176 billion.

Long-term future pricing options could be seen as a vote of confidence for the virtual currency, potentially paving the way for less market volatility and further increased investment.

“There will be, I expect, a lot more trades down the line,” Chou said.

“This is the first one, but it at least gives you the first guess from different institutional traders as to what bitcoin’s dynamics will look like from now until 2018.”

LedgerX has conducted around $16 million in bitcoin trades since it opened for business two months ago.

In a notice released this week, the Chicago Mercantile Exchange (CME) revealed its own plans to launch bitcoin futures sometime in the fourth quarter of this year. These futures are available for customer testing from today. CME’s bitcoin futures will be based on the underlying CME CF Bitcoin Reference Rate (BRR) value.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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