LedgerX, a regulated futures exchange in the US, offered Bitcoin Futures (BTC) contracts with a physical settlement. This allows investors to receive physical delivery of BTC, and some analysts believe this will further affect the price of BTC.

How might physical delivery affect Bitcoin’s price?
When Bakkt was first launched with support from its parent company at NYSE ICE, it received quite a buzz. A lot of interest in the platform was in the physical delivery of BTC, which means that if organizations wanted it, they could actually obtain BTC through Bakkt’s warehousing service.

At the time, composite advisor Jake Chervinsky confirmed that this could affect the bitcoin price. He said:

It is also worth noting that Bakkt wants to take charge of guarding and delivering the real Bitcoin. This means that institutional flows will reduce supply and thus (possibly) increase price as well. This is in contrast to other regulated futures markets such as the Chicago Mercantile Exchange and CBOE, which only trade in cash futures contracts. ”

Bitcoin contracts entered into can actually affect the price of BTC as they affect supply. When investors trade cash-settled futures contracts, they are not buying the actual BTC to expand the asset. This reduces the potential impact on the supply of the cryptocurrency.

On the LedgerX Futures Exchange, investors who purchase BTC can have a physical delivery of the digital asset. The Oslo Poor’s order book is fully transparent regarding market depth so that institutions can assess the market. LedgerX explained:

“Investors can trade off their position or stick to maturity, and if long, they can get BTC. All orders are executed in our Central Border Order Book with full price transparency in depth of the market. Negotiated closings are also printed in the Central Border Order Book. . ”

An increase in the number of futures exchanges providing virtually stable Bitcoin contracts could benefit the overall liquidity of the market. LedgerX CEO Zach Dexter said:

Futures have always been part of the company’s roadmap, and we’re excited to launch them today. Futures and options are a big part of the trading landscape, and we believe it is important to have a full portfolio of listed products to increase the liquidity of the platform and the ability to effectively hedge risk. ”

Futures have fallen slightly in recent weeks.
In recent weeks, especially after Bitcoin’s sharp drop from $ 12,000, the futures market has plummeted. Trading volumes have decreased and open interest has also decreased significantly, especially on investor focused platforms.

Despite the short-lived decline in Bitcoin’s advance, institutional activity is on the rise.

On September 2, Grayscale CEO Barry Silbert said the company’s assets under management had reached a record high. Of the $ 6.3 billion in cryptocurrency managed by the Grayscale Bitcoin Trust, it is $ 5.054 billion.

As institutional activity grows in the Bitcoin market, a variety of products from different regulated companies should strengthen the infrastructure in the market.

Source: CoinTelegraph