For the first time, a BTC Futures contract has been exchanged for real BTC

26 Jul, 2018
by David Borman
News
For the first time, a BTC Futures contract has been exchanged for real BTC

CCN is reporting today that for the first time ever, a bitcoin futures contract has been exchanged for actual bitcoin in what is known as an exchange-for-physical (EFP) transaction. The transaction took place between a CME Futures contract and crypto exchange itBit, and was facilitated by ED&F Man Capital Markets.

EFP transactions are hardly unheard of. Often a futures contract will be traded for the appropriate value of the actual commodity the contract refers too (rice, for example). This is generally done to give an investor more diversity and liquidity in a portfolio. Bitcoin is a unique case, as it is not actually physical, but can nonetheless be stored and transferred, and so can fall under this type of transaction.

All current bitcoin futures are settled in cash for the value of the bitcoin, not real bitcoin. This EFP is not a settling of the contract, but rather an exchange of the contract for the value in actual bitcoin. This option means investors have more liquidity with their investments, and is likely to catch on.

Hopefully this will be the first of many such transactions. As bitcoin grows into the traditional financial markets, options such as this will strengthen the percieved relevance and maturity of crypto as a whole.

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Read more about: Bitcoin (BTC)

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