Digital asset exchange Bitnomial has been approved to offer Bitcoin (BTC) futures and options contracts.
Established in 2015, Bitnomial acquired $7.5 million in capital through an equity raise that was finalized in December of last year. On April 20, 2020, the exchange operator confirmed that it had been granted regulatory approval from the US Commodity Futures Trading Commission (CFTC) to serve as a designated contract market.
Bitnomial will be among the first few crypto-asset exchanges to support both Bitcoin futures and options trading. Other trading platforms that also offer these products include the Chicago Mercantile Exchange (CME), Chicago Board Options Exchange (Cboe), ErisX, LedgerX, and Intercontinental Exchange’s Bakkt.
Bitnomial’s management confirmed that all of the exchange’s cryptocurrency derivatives contracts will be list-margined and physically delivered.
Luke Hoersten, CEO at Bitnomial, stated:
“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.”
As noted in the release, Bitnomial is in the process of coordinating User Acceptance Testing for trading and delivery, beginning on April 27, 2020. Traders will have to sign up via the exchange’s official website to take part in the testing.
Peter Johnson, principal at Jump Capital, pointed out that Bitcoin derivatives are a rapidly growing sector of the digital asset market. However, physically-settled BTC derivatives remain inaccessible to most US-based investors and traders, Johnson claims.
He added that the Bitnomial exchange allows US traders to gain exposure to Bitcoin in a safe, regulated, and “capital efficient” manner.
Johnson remarked:
“These products are also reliably tied to the underlying asset price via the option for physical delivery.”
The Bitnomial team and platform have received investments from Coinbase Ventures, the Digital Currency Group, Jump Capital, DV Chain, RRE Ventures, ValueStream Ventures, Indicator Fund, and several individual investors.
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