News First EFP Trade Involving Bitcoin Futures Completed in Wall...

First EFP Trade Involving Bitcoin Futures Completed in Wall Street

-

- Advertisment -

 

First EFP Trade Involving Bitcoin Futures Completed in Wall Street

Bitcoin took a significant step toward becoming a mainstream financial instrument this week, as two institutional investors completed the first-ever exchange for physical (EFP) transaction involving bitcoin futures.

As reported by CCN, the CME EFP Bitcoin transaction, facilitated by E D & F Man Capital Markets, a registered futures commission merchant, and itBit, an institutional-grade cryptocurrency exchange, saw two institutional traders swap a position in CME’s bitcoin futures market for an equivalent amount of the “physical” asset itself.

Wall Street traders use EFPs to hedge their futures positions and diversify their exposure to specific assets. They may also provide firms with leverage, capital, tax, and liquidity benefits. EFP transactions are negotiated off-exchange, often with the assistance of a broker, and then reported to the exchange for settlement.

While common in commodities trading, itBit and E D F & Man said that this transaction marked the first time that an EFP has been reported to a U.S. futures exchange where the underlying physical asset was a cryptocurrency.

Commenting on the trade, Brooks Dudley, of E D & F Man Capital Markets Inc., said that it marked an important step in the maturation of bitcoin as a regulated asset:

“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.”

Paul Ciavardini, director of itBit’s over-the-counter (OTC) cryptocurrency trading desk, added that institutional solutions such as EFP trades will “continue to reduce the friction” in the cryptocurrency marketplace.

The trade is also noteworthy because the U.S. Commodity Futures Trading Commission (CFTC) has thus far only approved bitcoin futures products that are cash-settled, meaning that investors receive the cash value of bitcoin when a contract expires, rather than the physical asset itself. With the availability of EFPs, they will have more flexibility in how they interact with this nascent asset class.

Follow ForkLog on Twitter and Facebook!

Source link

First EFP Trade Involving Bitcoin Futures Completed in Wall Street
ForkLoghttps://forklog.com
ForkLog is the online journal covering various cryptocurrency and decentralized technology related topics

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Top 7 Porn Sites That Accept Bitcoin/Crypto

Bitcoin and other cryptocurrencies are not that exotic anymore. Ever since the big boom on the crypto...

“Chinachain” aims to connect hundreds of cities across China. Will it work?

If there’s ever a “Chinachain” for business, sanctified and supported by the state, the BSN ( Blockchain...

Top 10 BEST Crypto Trading Books for New Traders (2020)

We may receive a small revenue share if you purchase something from this guide - with...

Crypto Firm That Connects Exchanges and Banks Receives $5m Investment From Wells Fargo

Cryptocurrency startup Elliptic recently held a Series B funding round which was joined by a venture arm...
- Advertisement -

Will New Zealand’s crypto salary project work?

Now in 2020, Bitcoin, and in a broader sense cryptocurrencies in general, have gone through hundreds of...

Is Tron’s decentralized app market really a “Las Vegas on the blockchain?”

The original idea behind creating cryptocurrencies was to offer a much more decentralized and convenient payment platform...

Must read

Top 7 Porn Sites That Accept Bitcoin/Crypto

Bitcoin and other cryptocurrencies are not that...

“Chinachain” aims to connect hundreds of cities across China. Will it work?

If there’s ever a “Chinachain” for business,...
- Advertisement -First EFP Trade Involving Bitcoin Futures Completed in Wall StreetFirst EFP Trade Involving Bitcoin Futures Completed in Wall Street

You might also likeRELATED
Recommended to you