XRP to be the new Futures Market
According to a report by Coindesk, Ripple’s XRP could be the new futures market. While the Bitcoin futures contracts were launched with great fanfare last December by two of the world’s largest and most respected exchanges, CME and Cboe, most people aren’t even aware that Ripple’s XRP futures had already been trading for the last 18 months.
XRP Futures Data Shows Positive Trends
Crypto Facilities, a UK-based startup, has been operating an XRP futures market which was developed by Ripple Inc. The company’s Chief Executive Officer, Timo Schlaefer, has been rather circumspect about the market, but he did say that analysis of recent data of the XRP futures has shown trends that indicate that large scale adoption of the cryptocurrency’s futures market may just be probable.
Schlaefer, in his interview with CoinDesk, said that they had had good order books, and the company was also now in talks with some of the big market makers to scale up.
In fact, Crypto Facilities had quietly partnered with Ripple Inc. and XRP Futures was the company’s second derivative (after Bitcoin) to be regulated under the Financial Conduct Authority, UK’s financial regulatory body.
When Bitcoin Futures were launched, XRP Futures were already trading at $14.2 million worth of volume per month. And when Bitcoin’s first Futures contract expired in January this year, Crypto Facilities’ XRP Futures trading had almost doubled to $24.6 million in volume of trade.
Future Growth in the Futures Market
While there are no confirmed statements from any of the big market makers, trends and movements indicate that the XRP Futures market could be growing.
CME Group has already participated in Ripple’s Series B investment drive in 2016, contributing $55 million to the project. Then, the company’s ex-head of Precious Metals and Metals Options joined Ripple as the leader for XRP Markets.
Cboe did not give a specific comment about XRP Futures markets, but did say that it was open to exploring more cryptocurrency options.
The co-founder as well as CEO of LedgerX, Paul Chau confirmed that his company was looking at the option of XRP Futures. Ledger X is a Bitcoin derivatives provider regulated by the CFTC that has already generated $100 million of notional volume for the first ever regulated as well as physically settled Bitcoin derivatives.
The only thing that may impede the scaling up of this product is the concern that investors have with regard to XRP’s concentration of holdings. The issue that many in the cryptocurrency community have voiced is that Ripple has too much control over XRP. Employees for Ripple reportedly hold big chunks of XRP. This leads to people fearing price manipulations, especially if XRP Futures are being settled in cash.
What the future hold for XRP Futures will depend on how Ripple manages to handle the issue of its holdings and people’s fears of price manipulation.