London Stock Exchange To Now Offer Bitcoin Futures And Options

By Kevin • April 14, 2023 10:36 am • Comments

The London Stock Exchange has just announced that it has formed a partnership with Global Futures and Options (GFO-X) to offer Bitcoin index futures and options.

This is the United Kingdom’s first regulated trading platform for Bitcoin index futures which makes it an important milestone for the world of crypto.

The fact that it is regulated just provide institutional investors more assurance as unclear regulatory guidelines on the industry have reduced the amount of crypto investments in the region.

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GFO-X is known as a platform that is licensed by the UK’s Financial Conduct Authority which gives this partnership a lot of credibility and will allow institutional investors to gain access to digital asset derivatives.

Many other regulated future and option exchanges in the EU may soon follow suit.

Reuters.com reports:

LSEG’s Paris-based LCH SA clearing unit will introduce a new, segregated clearing service, DigitalAssetClear, for cash-settled dollar-denominated digital assets traded on GFO-X.

The new service is anticipated to start in the fourth quarter of this year, pending approval from French and European Union regulators.

“GFO-X is taking the first steps to extracting efficiencies from new technologies within a traditional market structure, with the goal over time of delivering 24/7 trading to global regulated digital asset markets,” GFO-X said in a statement.

Rival CME Group (CME.O) already offers bitcoin futures and options, while CBOE (CBOE.Z) acquired a digital asset exchange, ErisX.

Deutsche Boerse’s (DB1Gn.DE)Eurex is due to launch dollar and euro denominated futures on the FTSE bitcoin index next Monday.

This new option to trading crypto or gain exposure to the crypto markets will be most appealing to investors who were affected by crypto exchanges like FTX last year.

The collapse of FTX had made many investors aware of the risk of storing crypto assets on these platforms so the London Stock Exchange’s new crypto offering will likely acquire some of those customers.

After all, the most important thing that intuitional investors look for is safety and security as they deal with billions of dollars of client assets.

So far, the data is showing that Bitcoin index futures and options is an asset class that is growing at a rapid rate as crypto becomes more and more in demand.

CoinDesk reports:

Clearinghouses offer a centralized venue in which to finalize trades that are agreed on an exchange.

Since the 2008 financial crisis, they have been favored by regulators as a way to lessen the risk of separate bilateral deals among players such as investment banks.

The move represents the latest foray by traditional finance players into the crypto market.

In March, the Stuttgart stock exchange secured a crypto custody license from German regulator BaFin, and Brussels-based clearinghouse Euroclear has said it will soon be ready to launch a bond settlement platform based on crypto-style distributed ledger technology.

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