Participants in the LedgerX venue will be able to obtain and hedge bitcoin and other digital currencies using exchange-traded and centrally-cleared options contracts. Initially, LedgerX anticipates listing one to six-month options contracts for bitcoin (BTC). Other digital currency contracts such as Ethereum (ETH) options, are expected to follow.
Regulated by the CFTC, an independent agency of the U.S. Federal Government, LedgerX will provide the surveillance and transparency institutional investors require. Eligible participants in the LedgerX venue will include registered broker dealers, banks, futures commission merchants, qualified commodity pool entities and qualified high net worth investors.
“A U.S. federally-regulated venue for derivative contracts settling in digital currencies opens the market to a much larger customer base,” states Paul L. Chou, CEO, LedgerX. “We are seeing strong demand from institutions that previously could not participate in the bitcoin market due to compliance restrictions against unregulated venues,” added Chou. “In particular, there is a desire for fund managers to hold financial instruments that are not correlated with the broader equity market, and digital currencies meet that need,” concludes Chou.
“These are exciting times to have a new digital asset class emerge,” comments Mark Wetjen, who sits on the board of directors for LedgerX’s parent company, Ledger Holdings. “I hope that the effort LedgerX put forward in the U.S. can set the stage for a global approach to this new digital asset class,” adds Wetjen.