The cryptocurrency derivatives arena just got its next big contender with the arrival of ErisX, which announced the opening of its crypto spot markets platform on April 30th.
The Chicago-based exchange, which boasts major financial backers in mainstream heavyweights like TD Ameritrade and Cboe Global Markets Inc., was first created in 2010 to facilitate traditional cash-settled swap futures.
The exchange’s leadership decided to pivot to crypto derivatives in late 2017 and announced last fall that their initial spot contracts offerings would be live by the end of Q2 2019 — a timeline the company has now made good on. A spot contract sets a buy or sell order for an asset, in ErisX’s case cryptocurrencies, which is then settled immediately on a specified date.
Commenting on the launch, ErisX chief operating officer Thomas Chippas hailed the crypto spot operations as only the beginning of the company’s coming journey:
“We took a disciplined and methodical approach to the launch of the ErisX spot market. As experienced market professionals we know that a launch such as this is a process, not a one-off event. We are moving from an initial phase to a public launch, and will continue to work with our partners, investors, and regulators to expand access.”
Crypto Futures Aimed for Later This Year
ErisX had first declared last year that it was looking to launch physically-settled crypto futures by the end of 2019.
The exchange confirmed in their latest announcement that, if greenlighted by the U.S. Commodity Futures Trading Commission (CFTC), those plans were still on and would entail the marketplace building out both a “regulated futures exchange and [a] clearinghouse.”
Of course, ErisX would like to keep to their planned timeline, but the CFTC will accordingly want to be fully confident in the exchange’s operations before granting the requisite approvals.
Last month, The Wall Street Journal reported that the Commission had yet to approve Bakkt’s own plans for physically-settled bitcoin futures over concerns with the forthcoming exchange’s custody plans. That reality apparently led to Bakkt’s powerhouse backers, Intercontinental Exchange Inc., acquiring crypto custodians Digital Asset Custody Company (DACC).
So whether ErisX’s crypto futures will also be temporarily held up by the CFTC remains to be seen. But what is clear is that some major finance players have long been keen on the platform’s product arrivals.
When TD Ameritrade first declared their investment into ErisX in 2018, the firm’s futures and foreign exchange managing director J.B. Mackenzie suggested the upstart exchange could eventually offer products like litecoin (LTC) and ethereum (ETH) futures. He said:
“It could open up additional cryptocurrency products on the future and spot side that our clients could potentially trade.”
ErisX Finishes 3rd Round of Series B
Amid its crypto spot market opening, the fledgling crypto derivatives platform also announced it had concluded its latest fundraising round, the third in its Series B so far.
Participants in the current round included previous ErisX backers like Cboe, Nasdaq Ventures, Pantera Capital, and Ethereum venture capital studio ConsenSys. New investors included Flow Traders and New York Digital Investment Group (NYDIG).
As part of the deal, NYDIG chief financial and chief operating officer Rob Flatley has joined the ErisX Board of Directors. On the news, Flatley said:
“ErisX is vital to the evolution of market structure and is completely aligned with our notion of best execution for both retail and institutional investors. We are excited to partner with them to bring proven trading and custody practices into this space.”
So, while ErisX still has a ways to go before it can achieve dominance in its market, the exchange and its supporters are angling to make such dominance closer to a guarantee than a bet.
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