This week, two major institutional investors sold their bitcoin futures in order to buy the cryptocurrency directly. It tells about the transformation of the digital currencies more attractive tools than their exchange-traded derivatives.
Large investors are coming into the cryptocurrency
A few days ago, a unique picture could be seen on the exchange — two institutional investors closed their positions in Bitcoin futures and bought tokens. Market experts attribute this to the growth of bitcoin prices, which has risen significantly in recent years and continues to grow.
The transaction was carried out at the CME Group — a merger of the Chicago and new York exchanges. Two traders working through the broker ED & F Man Capital Markets, which has a license to trade cryptocurrency futures, have sold their futures contracts and transferred money to the itBit exchange to buy tokens directly. Previously, they used futures to diversify their portfolios and hedge risks.
The deal they made is called EFP (Exchange Futures for Physical), it allows you to exchange a fixed-term contract for a "physical" asset on which the futures are formed (for example, futures for the dollar can be exchanged for the dollar itself, and futures for bitcoin can be exchanged for BTC tokens). Such transactions are carried out on the OTC market, later information about them gets on the exchange for offset of requirements.
The first transaction in history and an important step for cryptocurrency
Itbit cryptocurrency exchange, working only with large clients, and broker ED&F Man Capital Markets, reported that this is the first transaction of this type in the history with the participation of virtual currencies.
Brooks Dudley (Brooks Dudley), a broker representative, said that this is an important step for bitcoin, which speaks of the transformation of the main cryptocurrency into a serious financial instrument:
We are constantly developing new types of EFP contracts. We can buy futures for soybeans or wheat, we recently added to these transactions bitcoin futures, which is traded on the exchange Association CME Group.
Gender Cavadini, Director of the cryptocurrency exchange itBit, shared his opinion: he believes that such type of transactions will reduce a huge gap between virtual currencies and traditional financial accounting.
These transactions are also remarkable in that the American Commission on trade in goods and futures allowed only cashing out at the end of the contract. That is, when the term for which the futures are issued ends, the investor must receive the value of the cryptocurrency in money. EFP makes fixed-term contracts for virtual currencies a more flexible and convenient tool.
Users of cryptocurrencies watch how the penetration of bitcoin into large exchanges is going and see this as a chance for the emergence of large investors from wall Street in the industry.
KendraJarini007
Wow, bitcoin is now even involved in such operations. This gives hope for the widespread introduction and attraction of guys with large capital.
ThaiColonist
We can only hope for continued growth, then the exchange instruments, and the crypt itself will go big money.