Bitcoin Gains Traction with the First-Ever BTC Futures Physical Delivery
Cryptovest
Published Jul 25, 2018 10:03AM ET
Updated Jul 25, 2018 10:21AM ET
Bitcoin Gains Traction with the First-Ever BTC Futures Physical Delivery
Reports are coming in that the first-ever exchange for physical (EFP) transaction on Bitcoin (BTC) has been executed this week, suggesting that institutions are becoming inclined to favor cryptocurrency above futures contracts.
ED&F Man Capital Markets, a global financial brokerage business, and US institutional-grade cryptocurrency exchange itBit have brokered the deal, in which money invested into a Bitcoin futures contract were exchanged for the “physical” BTC. The transaction was carried out between two unnamed institutional investors, according to reports by several media outlets that quote both ED&F and ItBit as sources.
The deal marks the first time that an EFP was filed on a futures exchange with regards to a cryptocurrency and also supports Bitcoin’s status as an asset desirable for financial institutions.
Brooks Dudley, Vice President of ED&F, believes that this is a historical moment for Bitcoin.
“Every day we facilitate EFPs for our clients in physical assets such as soybeans, wheat and treasuries. EFPs on CME Bitcoin futures mark an important step forward in the maturity of the regulated derivatives market for digital currencies,” he said, as quoted by CCN.
itBit director Paul Ciavardini noted that the cryptocurrency market might experience less “friction” as a result of EFP trades by institutional investors.
If more institutional capital flows into Bitcoin, we’ll see the work of more seasoned investors buying and selling the asset according to market movements, probably leading to a slight reduction in the coin’s volatility.
Although we’re talking about the first-ever EFP transfer, we can expect to see more of these kinds of deals being made as the cryptocurrency market continues to gain favor on Wall Street and in London.
Coinbase’s release of services catering specifically to institutions might also boost this trend. For now, we can expect Wall Street traders to maintain their positions in futures contracts, opting to play it safe.
On the other hand, right now is a perfect moment for institutional traders who are willing to take the risk of entering the Bitcoin market without much hassle.
This article appeared first on Cryptovest
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