Subject to regulatory approval, LCH has partnered with GFO-AX to offer clearing bitcoin index derivatives.
In form of Bitcoin And as the wider cryptocurrency market gains global recognition amid the banking crisis, institutional investors in the United Kingdom can rest assured that the Rishi Sunak government is pro-digit assets. In a surprising move, London Stock Exchange (LSE) through its subsidiary LCH Limited, LCH SA has announced that it will begin offering clearing traded bitcoin index futures and options contracts on UK FCA-approved digital asset derivatives trading platform GFO-X . Subject to regulatory approval, the LCH platform will provide clients with an opportunity to trade cash-settled bitcoin index futures and options contracts.
Specifically, the new product, which is expected to launch in the fourth quarter of this year, is based on the GFO-X/Coin Metrics Bitcoin Reference Rate (GCBRR), a BMR-compliant reference rate of the US dollar value of bitcoin. As per the announcement, bitcoin index futures will be offered by LCH through a separate trading arm dubbed LCH DigitalAssetClear.
What Leaders Had to Say on Bitcoin Index Clearing Services
Commenting on the announcement, Frank Sousson, head of LCH DigitalAssetClear, said that there is a growing demand for bitcoin and crypto products in the country. Furthermore, the bitcoin market has outperformed traditional investment assets during the first quarter of 2023 and over the past decade.
“We look forward to working with GFO-X and market participants alike to create a liquid, regulated market place for these products and contribute to its safe growth and development,” Susan noted,
On the other hand, Arnab Sen, CEO and co-founder of GFO-X, highlighted that there is a need for a secure and regulated environment for institutional investors to tap into the booming cryptocurrency market. Other than this, ftx And the Alameda Research implosion has been used by both investors and regulators as a major learning experience.
“As the UK’s first regulated and centrally approved trading venue focused solely on digital asset futures and options, our combined vision is to ensure the trading and clearing needs of digital asset derivatives and meet the growing demand can be accomplished in a secure, highly regulated environment,” Sen noted.
the bigger picture
The Bitcoin halving event is about 379 days away, which is considered a major trigger for the cryptocurrency bull run. Institutional investors have shown tremendous interest in adding bitcoin and other digital assets to their balance sheets to hedge against high inflation. Already, over 174k bitcoins are held including publicly traded companies MicroStrategy Inc (Nasdaq: MSTR).
The announcement by London Stock Exchange-backed LCH comes amid a bullish trend in the cryptocurrency market. Notably, the price of bitcoin is up more than 85 percent on Friday to trade around $30,906, compared to an 8 percent increase in the S&P 500 during the same period.
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