A U.K-based company, Crypto Facilities is to launch Litecoin (LTC) derivative contracts by Friday 22nd June.
According to a press release by the futures trading platform, it’s this will be the first-ever regulated LTC-USD futures
The new USD-denominated derivative will give investors an opportunity to either long or short LTC futures contracts.
Investors will be able to “express sentiment” as well as have a framework that allows them to “manage risk” effectively.
The London-based Crypto Facilities is regulated by the UK Financial Conduct Authority. Users will be able to access short or long futures contracts with Litecoin acting as the underlying collateral.
What’s more, investors will have the opportunity to choose from weekly, monthly, or quarterly maturities.
Crypto Facilities has a partnership with CME Group. In this deal, the platform provides reliability and transparency when it comes to pricing.
These same data are availed to financial institutions; top-tier trading firms as well other data vendors around the globe
The CEO of Crypto Facilities, Timo Schlaefer, put the reason for arriving at the decision to have Litecoin futures to “strong client demand”.
The community of users had expressed a strong desire to have the Litecoin contracts.
“We believe our LTC-dollar futures contracts will increase price transparency, liquidity, and efficiency in the cryptocurrency markets,” Schlaefer said.
On his part, Litecoin creator Charlie Lee had similar sentiments about the development. He believes the decision has come at the right time.
According to him, this will play a vital role in opening up Litecoin trading to a wider base of institutional investors.
He felt that it was the right step as it is likely to increase the LTC’s liquidity. Apart from that, he sees it as an avenue through which more people will have an easier way to easily “get in and out of Litecoin.”
There’s a lot of great promise from the UK-based platform. Crypto Facilities says that it will offer users risk management capabilities, all in real-time.
Clients are also able to “take a directional view on a variety of cryptocurrencies and to hedge associated price risks.”
Litecoin Futures are being launched just a month on after another crypto asset was added. Ethereum-based futures contracts were launched a month ago to add on to those of Bitcoin
(BTC) and Ripple (XRP).
Litecoin should be able to benefit from the immense exposure. The first indicator of its uptake will be total volume.
For instance, Ethereum futures will likely see a spike in volume. Crypto Facilities expects trading volumes for the ETH derivatives to hit highs of about $150 million in Q2 alone.
This will account for about 10% of total volume on the platform.
A tinge of controversy with BTC futures
LTC-USD futures come hot on the heels of a recent controversial claim by Tom Lee of Fundstrat.
According to Lee, trading Bitcoin futures was behind the poor show of BTC prices over the last few months.
He said that BTC prices suffered huge price volatility in relation to these products. For example, he said that CBOE Futures contract expirations were responsible for the weakening of BTC prices.
Away from the controversy, Litecoin continues to struggle against stiff resistance as it tries to break above $100.
The coin trades at $97 at the time of writing and will likely stay within the $96 and $100 range. If sentiment holds, we could see it rallying to hit its last price at $107.