Bitcoin futures market GFO-X delays launch to Q1 2024

GFO-X has delayed its launch to the first quarter of 2024 from the end of this year to allow clients more time to prepare for the opening of the crypto derivatives market.

The London-based firm is said by sources to be working with various banks, market-makers and trading firms to ensure their readiness to trade bitcoin derivatives on GFO-X from day one and has decided to delay its launch by three months to allow these firms more time to prepare.

GFO-X said in April, after it reached agreement with LCH whereby the LSE Group-owned clearing house would be the central counterparty for the market, that it expected to launch in the fourth quarter of this year.

A spokesperson for GFO-X declined to comment.

The platform, which will offer bitcoin futures and options from launch, is set to be the UK’s first centrally cleared trading venue for digital asset derivatives.

The involvement of LCH is key as the clearing house will protect clients from the default of another trading firm or liquidity issues at GFO-X itself, a major concern since the collapse last year of FTX.

The clearing house is building for GFO-X a segregated service called LCH DigitalAssetClear, LCH’s first foray into cryptocurrencies.

GFO-X will compete in bitcoin futures and options with large exchanges including Eurex and CME Group.

Frankfurt-based Eurex launched in April a bitcoin index futures contract denominated in Euro and US dollar based on an index from FTSE Russell, owned by the LSE Group.

The Eurex Euro bitcoin futures contract traded 420 lots from its launch on April 17 to the end of August and the US dollar denominated contract traded 11,000 lots to the end of August, according to data from trade body the FIA.

CME Group was quick out the blocks with its contract, launching its bitcoin future in December 2017. The US exchange has since followed up with micro cryptocurrency futures and derivatives on other cryptocurrencies.

The CME bitcoin contract traded 1.8 million lots this year to the end of August, up 7% on the same period last year, according to FIA data.

Intercontinental Exchange cancelled in August most of its physically-delivered bitcoin futures and options contracts due to lack of demand.

The main European financial regulator opened on Thursday its second consultation on crypto assets regulation, targeting transparency disclosure by trading venues.