Timo Schlaefer, who worked as the executive director at Goldman Sachs and then founded Crypto Facilities Ltd., a London-based brokerage firm, has announced the launch of Bitcoin derivatives trading platform. The announcement has been received by the trader community well as they realize that it will give impetus to Bitcoin’s popularity.
Nonetheless, the availability of mature financial products such as Crypto Facilities derivatives shows that Bitcoin is taken more and more seriously by the financial establishment. Talking to media professionals Schlaefer said that the Bitcoin space still lacks professional, reliable marketplaces, and this is what we provide.
However, he admitted that his company applies the same standards in terms of risk management, compliance and reporting as traders would see in the traditional finance space. According to him the firm has a number of additional financial products in the pipeline and plans to expand its range of services.
Schlaefer is of the view that the real potential in the technology behind Bitcoin the Blockchain which is a publicly-distributed ledger system that makes sure all transactions are verified in a transparent, decentralized and secure fashion, can pivotal role. With Crypto Facilities Ltd traders would not trade financial products such as Bitcoin options and futures.
The company says that Bitcoin derivative trading platform will allow the traders go long and bet that the price of Bitcoin will rise, or go short and bet the price will fall. Here, the first derivative offered by Crypto Facilities is a forward contract – a contract to buy or to sell an asset at a specified future time at a price agreed upon today – on the U.S. dollar price of Bitcoin.
Special Features for Traders
Moreover, as the forward contract serves to hedge against Bitcoin volatility, or to benefit from future swings in the Bitcoin price, the company expects it will gain popularity among traders. The forward contract comes with different maturity months, and traders can choose from the nearest three in the March, June, September and December cycle.
Crypto Facilities Ltd. informs that once a forward reaches maturity, it will be settled automatically. Additionally, as traders do not have to wait until maturity to get out of their position, they can trade out at any time.
Crypto Facilities Co-Founder and COO Jean-Christophe Laruelle said that their forward is probably the simplest and most effective tool out there to protect traders against Bitcoin volatility and if they want to lock in the value of one Bitcoin, they sell one forward.
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