CoinFlex exchange is targeting Asia’s retail investors who are looking for bitcoin futures contracts that are less prone to price manipulation. Accordingly, the exchange intends to offer physical delivery of Bitcoin contracts to Asian traders.
CoinFLEX Targets Asian Traders
The exchange was rebranded from Coinfloor to Coin Futures and Lending Exchange or CoinFLEX. The exchange is based out in Hong-Kong, spearhead by Mark Lamb as its CEO. CoinFLEX’s physical delivery of bitcoin futures means that the owner of the contracts will receive the delivery of Bitcoin instead of Cash upon the expiry of contracts.
The exchange claims that physical bitcoin futures will tend to face less price manipulation, whereas the process for settling contracts in cash could be manipulated.
Crypto industry counts under the list of burgeoning trends, which means, global investors eye on leveraging the maximum benefits meantime avoiding the price manipulations.
With Bitcoin holding the highest dominance in the crypto market, CoinFLEX states that retail investors from Asia can now invest in the bitcoin futures contract, which is rampant in cash-settlement contracts. It is the new cryptocurrency futures exchange; in fact, CoinFLEX claims itself as the first exchange to provide physical delivery of bitcoin futures contracts.
To note, Bitcoin price in the cash-settlement contract is calculated via a formula that uses bitcoin price of other exchanges. On a similar view, Mark said in an interview said;
Professional and retail traders alike are affected by price manipulation in the cash-settled futures market. In physically delivered contracts, anyone long at expiry receives the underlying bitcoin. There are no formulas involved.
Although CoinFLEX is from Hong Kong, the city’s Securities and Futures Commission is not fervent to companies that offer to the trade of futures and derivative contracts. When asked Mark on whether or not CoinFLEX provides this service in HongKong, he remains quiet.
Nevertheless, the exchange is likely to compete with Intercontinental Exchage Inc., which introduced Bakkt exchange with the similar service of CoinFLEX, they physically delivered futures contracts.
While the fact that physically delivered contracts are less-likely manipulated, Benjamin Roth who is the global head of trading at Kenetic Capital says that he hasn’t seen “much evidence of price manipulation in the cash-settlement market” as well.
With a trader’s perspective, he adds that traders naturally like to trade on volatility. Meantime he agreed that there was a demand for physically delivered bitcoin futures contracts. He says;
As traders we do not particularly worry about increased volatility going into a contract’s expiry, because traders naturally like to trade on volatility.
Also, the exchange had recently raised a US$ 10 million from several blockchain investors, including Polychain Capital, Divergence Digital Currency, NGC Ventures II, and Roger Ver, bitcoin cash advocate.
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