Ripple XRP Futures may not be as much hyped as Bitcoin Futures, it’s in the market and capable of becoming mainstream very soon.
Crypto Facilities, a U.K based cryptocurrency startup launched a Futures market for Ripple almost 18 months ago and is since operating it. CEO Crypto Facilities, Tom Schlaefer had not shared much about the product but he did hint that XRP Futures is soon going to see vast adoption.
“We have pretty good order books,” said Schlaefer. “And we’re in the process of working with some of the large market makers to draw that further.”
Though XRP Futures couldn’t gain much fanfare, it had always been ahead of Bitcoin Futures. Months before Bitcoin got its first Commodity and Futures Trading Commission’s (CFTC) permission to launch Bitcoin derivatives, Crypto Facilities secretly partnered with Ripple to roll out the XRP Futures.
And in December, when Cboe and CME group launched their first Bitcoin Futures product, Crypto Facilities’ XRP Futures was already trading at $14.2 million volume per month. In January, the Crypto Facilities’ owned XRP Futures had doubled in volume when Cboe’s Bitcoin Futures contract expired.
Crypto Facilities’ volume had been growing through February and Schlaefer says he expects “March to set a new record”.
XRP Futures price mirrors the price of XRP
By the financial data shared by Schlaefer, it seems like the XRP Futures price moves in accordance with the price of XRP.
For instance, XRP Futures value had not been impressive from the time it was launched, October 2016 to March 2017. In March, XRP Futures more than tripled in value to $3.08 million and quadrupled to $12.1 million the next month. That was the time when XRP value also witnessed similar gains, surging from $0.3 in April to $0.34 in May.
Similarly, in January 2018, when XRP reached a record high of $3.35, XRP Futures’ value also jumped to $24.6 million.
Schlaefer says that there are about 2,000 to 3,000 registered investors for XRP Futures and while this looks like a small quantity, these investors account for about 30 percent of Crypto Facilities’ total investors.
It looks like there is more to come of the XRP Futures.
While the CME group had been very tight-lipped about its plans regarding XRP Futures, the firm had been pretty interested in the product. CME Group participated in Ripple’s $55 million series B funding round in 2016 while after that an official from CME Group also joined Ripple’s team as the head of XRP markets.
Cboe also hasn’t said much about XRP Futures however, the company hinted about launching more cryptocurrency options.
LedgerX is the CFTC regulated Bitcoin derivatives provider and its co-founder and CEO, Paul Chou said that his firm was exploring XRP Futures.
Future manipulation concerns
Chou also counted some of the reservations that might act as barriers in way of his company’s adoption of XRP Futures.
He noted that the decision of adding XRP Futures on LedgerX will be based on the company’s analysis of XRP’s “concentration of holdings”.
LedgerX is also concerned about Ripple and its XRP ownership. Ripple employees reportedly hold large amounts of XRP and that is concerning even to the crypto community.
Chou said that on demand of customers, he had formed an investigating group that will investigate if the individuals holding large amounts of XRP have the potential to manipulate the market.
“Physical settlement avoids those issues because you are not beholden to some abstract price that might or might not be manipulated. You either want the crypto, or you don’t,” he added.