Seed CX launches test phase for Bitcoin Margin Swaps

The race is on to Bitcoin financial products continues. Now Seed CX switches in the competition for the funds of institutional investors. The Bitcoin exchange, revealed now a over-the-counter Bitcoin derivative. It might already be available in the near future.

By Anton Livshits
15. August 2019BTC$9.697,19 -8.62%part Facebook Twitter LinkedIn xing mail

The Bitcoin-exchange-Seed CX has on 13. August a private Bitcoin derivatives launched. As The Block reported exclusively, will offer the US company physically settled Bitcoin Margin Swaps in the United States. If everything goes according to Plan, this could be in three months. The financial product is aimed at institutional investors.

In the case of Margin, Swaps are OTC derivative transactions between two parties. These are to be fulfilled in the sense physically, as that has to deliver a page to the end of the contractual period to the base value (here Bitcoin). For these derivatives, the competent subsidiary company Seed SEF has already started the test phase. The Tests will last the entire month of August. In the case of a positive outcome, the product could launch in the U.S., however, there is still the blessing of regulators to be seen.

The Seed-CX-CEO Edward Woodford showed, with regard to such approval, confident, finally, you have worked in the past 18 months, closely with of for such financial products relevant U.S. Commodity Futures Trading Commission (CFTC) together:

We work closely with the CFTC, and hope to be able to the product within the next three months to the public to introduce.

Seed CX to existing Bitcoin derivatives complement

Woodford claimed against The Block, that Seed CX be the first one to the such Bitcoin Margin Swaps in the US. He explained that such a financial product gives the customer the ability to trade Bitcoin from a leveraged Position. Accordingly, it would be in the USA until today, no comparable offer. Furthermore, Woodford argued that the Margin Swaps due to the planned combination of weeks and month, a "perfect complement" to the already available Bitcoin contracts-were derivatives.

Maurice Goodman, head of risk and handling at Seed CX, spoke also on the measure of risk:

We will use the Value-at-Risk model with a confidence level of 99% and a 10-day margin period, with additional aspects to take into account the extreme phases of the volatility of the contractual underlying.

The Bitcoin derivatives are on the way

other Bitcoin derivatives are, however, on the way to the start line. To call the of many most-anticipated Bitcoin Futures of Bakkt wouldn't be the last. Here is expecting this year's start date. Recently, it even looked after that the Bitcoin Futures of LedgerX would overtake those of Bakkt on the last meters before the Start. As is so often the authorities have, however, also LedgerX, a dash through the bill. Reports of an already existing CFTC approval for Bitcoin Futures of the company turned out to be a hoax.

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