Litecoin futures go live on June 22nd, 2018, through Crypto Facilities, a UK-based cryptocurrency trading platform. Crypto Facilities is fully authorized and regulated by the Financial Conduct Authority (FCA). Traders can go long or short on the litecoin-based derivatives. The litecoin futures products have LTC as the underlying cryptocurrency and are denominated in USD, with weekly, monthly, and quarterly maturities. A future is a bet on whether the price of the underlying currency will go up (long) or down (short). The company added the product due to strong client interest and according to Crypto Facilities CEO Timo Schlaefer:
“We believe our LTC-dollar futures contracts will increase price, transparency, liquidity, and efficiency in the cryptocurrency markets.”
While bitcoin futures products have made their way across the world, few, if any, exchanges or financial services providers currently offer regulated litecoin derivative products. While retail investors will benefit, the launch of litecoin futures now means that it is easier for institutional investors who can hedge or speculate on litecoin price movements, and the move should improve litecoin liquidity. Litecoin is currently ranked sixth by total market capitalization and is often referred to as the little sister to bitcoin, identical in nearly every way except it’s faster and cheaper.
Ethereum, ripple, and bitcoin derivatives are already available on the Crypto Facilities platform which currently offers a maximum of 50 times leverage on trades, depending on the asset. Ethereum futures were launched in May, and the platform expects ether trade volume to reach $150 million this quarter. It is estimated to be 10% of the total trade volume for this particular exchange. The addition of litecoin futures could signal an increase in adoption for the cryptocurrency. Litecoin creator, Charlie Lee, has stated that the addition of litecoin futures will make it easier for people to access the cryptocurrency.
While generally seen as a positive sign, there are some suspicions about cryptocurrency futures. On the same date that bitcoin futures were launched by the CME, the price began a six-month downward spiral, and a report from the University of Texas has indicated that the Tether cryptocurrency, backed by USD, is being used to deflate prices. These are not merely idle speculations, as the CFTC in the USA is looking into price manipulation in the bitcoin market.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.