Bitnomial is the latest cryptocurrency exchange to receive the green light from the US Commodity Futures Trading Commission (CFTC) for offering US Bitcoin futures and options as designated contract markets (DCM).
Announced on April 20, the derivatives contracts are to be margined and physically delivered, which means that traders will get Bitcoins after the final settlement of the contract.
User Acceptance Testing Scheduled For This Month
Even though the launch date of derivatives trading is still not formally announced, the exchange will begin with the user acceptance testing (UAT) for trading and delivery later this month.
“We are building the Bitcoin Product Complex, a suite of interrelated financial products, starting with quarterly Bitcoin futures, micro futures, and options. Additionally, our products initially trade on 37% margin and are settled on-chain instead of book entry.” Luke Hoersten, founder and CEO of the exchange, said.
Institutional Demand in Crypto Is on The Rise
Institutional interest in Bitcoin continues to increase. As CryptoPotato recently reported, CME saw one of its best trading days, recording a trading volume upwards of $1 billion.
A February report JP Morgan revealed that institutional interest in Bitcoin is increasing. Per the document, it’s established authorities such as the Chicago Mercantile Exchange (CME), and Bakkt (the Bitcoin futures trading platform headed by the Intercontinental Exchange), that receive most of the attention.
The paper also highlights that the increasing interest is also attributed to stablecoins and their growing popularity. Yet, the document reads that there are plenty of regulatory hurdles, especially for privately-owned stablecoins such as Facebook’s Libra.
It’s also worth noting that the infrastructure for institutional investors to get involved in the field is also improving. Just yesterday, the well-known institutional custodian BitGo acquired a financial platform to facilitate portfolio management. With Bitcoin’s halving just around the corner, it’s likely that this is a trend to continue.