Another Bitcoin Settled Futures Approval by the CFTC

bitcoin settled futures

Bitcoin Settled Futures and the CFTC: Exciting News Ahead!

The times are a changin“, stealing the lyrics from the famous singer/songwriter Bob Dylan, which perfectly describes the fast-changing Bitcoin space lately. The CFTC has just given the provider, ErisX, the green light to offer a new bitcoin futures contract. ErisX is backed up the well known and widely used US brokerage called TD Ameritrade. Their newly acquired license, called the “Derivatives Clearing Organization”(DCO) license will enable the company to launch Bitcoin futures in compliance with US regulations. This is the second such approval of a Bitcoin settled Futures exchange this year.  LedgerX also gained their Bitcoin Settled Futures approval only a week ago.


Futures Definition: “Futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. Here, the buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date. Underlying assets include physical commodities or other financial instruments. Futures contracts detail the quantity of the underlying asset and are standardized to facilitate trading on a futures exchange. Futures can be used for hedging or trade speculation.”(Source: Investopedia)

Bitcoin Settled Futures vs Cash Settled Futures

The CBOE and CME groups both launch Bitcoin settled futures contracts in late 2017 with the later still offering them. They differ from the Bitcoin settled futures in that they are actually settled in US Dollars (cash-settled) instead of Bitcoin. This means that CME will settle at expiry, the difference in the price of the underlying asset (Bitcoin) but in cash, whereas ErisX and LegderX will settle the trader in real Bitcoin.

This will require the company to hold Bitcoin, having custody of the Bitcoin in itself bring a whole set of challenges, so far their plan seems to have been given the nod by the CFTC, a positive sign for the industry as a whole. Many also speculate that having a Bitcoin settled future will have a positive effect on the price, due to the fact that the exchange will need to house real Bitcoin, removing supply from circulation.

Will we see a Bitcoin ETF SEC approval soon?

The ETF applications of 2017 and 2018 still remain fresh in the community’s minds, as well as the subsequent disappointment on each decline, however, the approval of the CFTC Bitcoin settled futures may be the early etchings of what could lead to the holy grail, a Bitcoin ETF approval.

One of the reasons cited by the SEC for declining previous ETF applications was the issue of custody. Since then there were several entrants to market each offering Bank-grade Bitcoin custody solutions. the recently approved ErisX will likely be using one of these solutions, adding confidence that the SEC may now be satisfied on future ETF applications.

Another reason the SEC has held off from issuing the ETF license is that man of the exchanges that will be used for pricing are based outside of their jurisdiction and as such, they are not able to monitor or verify the activities. Having these new products go live later this year will give the SEC the opportunity to see them live in action and may further bolster the chances of a Bitcoin ETF.

What do you think this will mean for Bitcoin and the Cryptocurrency market in general? Let us know, add your voice by joining the discussion on the CryptoFish News Reddit or Join the CryptoFish Facebook Page here.

Buy Cryptocurrencies with CryptoFish

CryptoFish provides the latest news, educational insights and a secure place to buy various cryptocurrencies.

At CryptoFish, we offer a very simple way for you to instantly purchase leading cryptocurrencies like Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Ripple using your debit or credit card online.

CryptoFish does not store your credit card details, encrypts your personal information and is GDPR compliant, making it one of the safest and most secure options.  You can trust CryptoFish to easily, securely, and instantly buy cryptocurrency.

If you have any questions, please check out our FAQ section on the website.  Our super-friendly CryptoFish support team is also here to assist you. You can drop them an email or chat live on the website.  To chat, simply type your question into the chat box on the bottom right hand side of your screen.

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

CryptoFish will use the information you provide on this form to be in touch with you and to provide updates and marketing.