BTSE, an exchange on which to trade bitcoin and other cryptocurrencies, has now announced an upgrade of its offering. Accordingly, one should be able to trade futures on the platform soon. However, some details are kept secret by the stock market.
BTSE plans to add the option to trade futures on its platform later this month. According to a press release available at BTC-ECHO, operators are particularly keen to attract investors who have been holding back on investing in Bitcoin and their peers. The press release, however, leaves important details.
What are Perpetual Contracts?
As a new offer, the company lists "linear perpetual futures contracts", the so-called Perpetual Contracts. In contrast to ordinary futures , these do not run out, but extend automatically. Usually they are traded very close to the Underlying of Bitcoin, BTSE also lists its own indices.
By offering products that are mainly known from traditional finance, the stock market hopes to create greater attractiveness. In the end, this should also attract institutional investors. Accordingly, the press release states:
"BTSE's futures product will take trading in a new direction. With a combination of new features, the platform will not only attract devotees of cryptocurrencies, but also professional traders who have previously been reluctant due to lack of familiarity and ease of transactions. "
By offering linear futures, BTSE expects an advantage over inverse futures:
"There are usually inverse futures in the cryptocurrency space. The non-linear nature of inverse futures leads to a complex mechanism of profit and loss. Conversely, traditional futures contracts use a linear design. Any price movement of a contract leads directly to a pro-rated profit and loss. Linear futures make it easy for traders to hedge and eliminate the foreign exchange risk of nonlinear futures. The clear benefits of linear contracts are the rationale for choosing BTSE. "
BTSE announces something big, but leaves the most important thing open
The most important thing, however, the stock exchange fails to announce: which type of futures it offers. Whether these are now based on Bitcoin or one of the two own BTSE indices, leaves the press release open. On the other hand, the stock exchange announces many advantages that should make an investment worthwhile for both institutional and "ordinary" traders:
Multi-Currency Support: By offering the support of tether, Chinese yuan, euro, British pound, Hong Kong dollar, Japanese yen, and the Singapore dollar, the stock market promises to "attract traders worldwide" and accumulate better liquidity. "
Support for Fiat & Cryptocurrencies: Users can invest directly in Futures products from Fiat without first having to switch to cryptocurrency.
linear futures contracts
Perpetual Swaps: Futures with no expiration date
FIX Protocol Support: (Traditional) traders should be able to translate their strategies directly into the Bitcoin world.
What sounds convincing at first remains a few explanations. Neither BTSE mentions what type of futures it should be (see above), nor explains the crypto exchange, such as the "FIX Protocol Support" should run technically. BTSE has not responded to a request from BTC-ECHO.
The BTSE indices
Presumably, the announcements refer to the three listed indices. These are the following:
BTC index
BTSE 5: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethereum Classic
BTSE 10: Bitcoin Cash, Litecoin, Ethereum Classic, Verge, Monero, ZCash, Hypercash, Digibyte, Decred, Siacoin
Nevertheless, one does not hold back with high promises. Brian Wong, co-founder of BTSE, is quoted as saying:
"We want to offer a range of synthetic instruments with leverage and high liquidity in the $ 200 billion cryptocurrency market. The BTSE platform has been designed as an effective hedging platform for established traders and as a gateway to retail and institutional investors. "
Whether that is enough to inspire the notorious and long-awaited institutional investors for Bitcoin and consorts, remains to be seen, of course. Anyway, futures trading should start in February: soon ™ .