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 Bitcoin futures may have launched with great fanfare, but on the other hand, the same cannot be said for XRP futures. In fact, UK-based startup Crypto Facilities has been operating the world’s third-largest cryptocurrency futures market, developed by blockchain startup Ripple Inc., for nearly 18 months. While company CEO Timo Schlaefer has been very tight-lipped about the product so far, he believes trends in recent data suggest wider XRP futures adoption may be around the corner. “Our order book is pretty good," Schlaefer said. "We are working with some large market manufacturers to grow further. ” In fact, while Bitcoin is still months away from the first Commodity and Futures Trading Commission (CFTC)-regulated Bitcoin derivatives, Schlaefer’s company has quietly partnered with Ripple and launched XRP futures, the second cryptocurrency futures product regulated by the UK’s Financial Conduct Authority (FCA). Later, when Chicago commodities giants Cboe and CME Group first launched Bitcoin futures in December, Crypto Facilities’ own XRP futures had a monthly trading volume of $14.2 million. And when Cboe’s first Bitcoin futures contract expired in January, Crypto Facilities’ XRP futures trading volume nearly doubled to $24.6 million. However, outside the company's own circle of investors, few knew that futures trading was taking place, let alone that kind of volume. Now, that trend appears to be changing, with the company heading into another positive month and others exploring contracts. "Liquidity has been growing," Schlaefer added. “We've already seen our sales increase in February and expect a new record in March. ” reflect price While Schlaefer would not reveal the identity of the large market makers the company is currently pursuing, he provided data showing the company’s growth, which largely reflects the price of XRP itself. For example, trading volumes in the company’s cash-settled XRP futures, which was officially launched in October 2016, were relatively flat until March 2017. This comes as XRP futures trading volume more than tripled to $3.08 million, quadrupling the next month to $12.1 million. Meanwhile, the price of XRP has experienced similar growth, rising from $0.03 in April to $0.34 in mid-May before shrinking significantly. But in January 2018, as Bitcoin reached a record high of $3.53, the price of XRP followed suit, reaching $24.6 million. XRP Futures, Crypto Facilities According to Schlaefer, while the number of registered investors in XRP futures ranges from 2,000 to 3,000, he estimates that those investing in the product represent approximately 30% of Crypto Facilities’ total investors. With most trading falling within the realm of retail investors, XRP also represents a growth opportunity for the company and, Schlaefer believes, the industry as a whole. "We still want them to have a more diverse user base," he said. ”“But it's moving in the right direction. ” Continuous motivation And there's reason to believe more may be on the horizon. The $55 billion CME Group has set a precedent by partnering with Crypto Facilities to launch its own Bitcoin futures offering. It participated in Ripple’s $55 million Series B investment in 2016, although a CME Group representative declined to comment on whether the company was specifically exploring XRP futures. Shortly thereafter, the former head of precious metals and metal options at CME Group also joined Ripple as head of XRP markets. CBOE also did not make its position clear when answering questions. In response to the investigation into XRP futures, a Cboe spokesperson reiterated the company’s CEO’s statement. Last year, the company’s CEO stated that the exchange was open to adding additional cryptocurrency options. But it may be the use-case-focused startups that are the first to finally embrace XRP. Paul Chou, co-founder and CEO of CFTC-regulated Bitcoin derivatives provider LedgerX, said his company is exploring the possibility of XRP futures. Last year, LedgerX launched the first regulated, physically-based Bitcoin derivative product and traded $100 million in notional volume. future operations Still, Paul Chou hinted at pre-orders that could delay adoption. For example, he said the company's decision on whether to include XRP futures was largely based on its analysis of XRP's "concentration of holdings." In fact, the reasons for LedgerX’s concerns reflect concerns within the cryptocurrency community about the company Ripple and its control of XRP. First, Ripple employees reportedly hold large amounts of cryptocurrency. Therefore, in response to customer demand, "they will definitely ask about XRP," Zhou said, the company set up an investigation team. In particular, the group is looking into the possibility that those holding large amounts of XRP could manipulate prices, especially if futures contracts are settled in cash. Zhou concluded: “Physical solutions avoid these problems because you are not sure about some abstract price that may or may not be manipulated. ”You either want a password or you don't.  |
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