Institutional investors will always look for new ways to gain access to Bitcoin and other cryptocurrencies. In most cases, they will use dark pools or regulated investment vehicles such as CFDs and options trades. LedgerX is one of the companies focusing on swaps and options trades for cryptocurrency. So far, business is booming, as it processed over US$1 million worth of transactions in the first week.
There is a growing demand for exposure to Bitcoin and altcoins by institutional investors. One has to keep in mind these types of investors will not sign up for a centralized exchange and buy Bitcoin outright. Nor will they stop by a local Bitcoin ATM to pick up a few thousand dollars’ worth of BTC. Institutional investors won’t use LocalBitcoins or similar platforms either, for obvious reasons.
Instead, they prefer more regulated investment vehicles such as CFDs, swaps, and options trades. These investment vehicles provide exposure to Bitcoin and sometimes other cryptocurrencies without forcing investors to actually buy Bitcoin or altcoins themselves. There is always a premium to pay for these types of vehicles, but most institutional investors will gladly go the extra mile in this regard.
More specifically, LedgerX is seeing major success in the institutional market right now. During its first week of operations, the company recorded a volume of over US$1 million. That may seem like peanuts to the untrained eye, yet it goes to show there is a genuine demand for regulated investment vehicles associated with cryptocurrencies. Whether or not this volume will increase spectacularly over the next few weeks and months remains to be determined.
Although the service provider looks pretty appealing, one has to keep in mind LedgerX is still a new exchange and clearinghouse. For cryptocurrency enthusiasts, it may seem as if the company has been around for a few decades already, but that is far from the case. The team now has to build its reputation and persuade investors to use their platform for this purpose. That is not an easy feat under any circumstance, as cryptocurrencies are still frowned upon by a lot of people.
What makes LedgerX so appealing is its solution for buying and selling Bitcoin through swaps, while monetizing volatility with options. This provides multiple ways to generate revenue for traditional investors, and there will be plenty of people looking to take advantage of it. Moreover, the company has been working in concert with US regulators to ensure that all of its services are compliant with the law. For now, it is the only company to have provided such a service, but it won’t take long until competition crawls out of the woodwork.
All of this positive momentum has also been a contributing factor to the current Bitcoin price trend, by the looks of things. Bitcoin is a topic that’s heavily discussed everywhere you look these days. Most “experts” still shrug it off as a fad and a bubble waiting to burst. Others are making a lot of money because they see Bitcoin as the future of finance in one way or another. Only time will tell how things evolve, but for now, the momentum clearly favors Bitcoin over anything else.
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