First CME futures contract exchanged for physical Bitcoin asset

E D & F Man Capital Markets and crypto trading platform itBit facilitate first exchange for physical Bitcoin transaction.

Two Wall Street firms have completed the first-ever physical Bitcoin asset exchange from a CME Bitcoin Futures contract.

Futures commission merchant (FCM) E D & F Man Capital Markets and crypto trading platform itBit reported the first Exchange for Physical (EFP) Bitcoin transaction on behalf of the institutional clients.

The futures component of the EFP was traded by E D F & Man, while itBit completed the cash leg of the transaction between the institutional counterparties involving physical Bitcoin.

“Every day we facilitate EFPs for our clients in physical assets such as soybeans, wheat and treasuries. EFPs on CME Bitcoin futures mark an important step forward in the maturity of the regulated derivatives market for digital currencies,” said Brooks Dudley of E D & F Man Capital Markets.

According to CME Group, EFPs allow investors to convert between futures and either exchange-traded funds (ETFs) or baskets of the underlying index stocks without exposure to intraday market execution.

The exchange operator adds that this enables investors to optimise their holdings to meet leverage, capital, tax and liquidity needs, as well as differentiating between the trading tools and how they hold exposure.

“This was a great opportunity to utilise itBit’s Trust charter with E D & F Man on another institutional solution that will continue to reduce the friction in the crypto marketplace,” Paul Ciavardini, director of itBit’s OTC trading, concluded.

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