The US bank has traded its first ever Bitcoin non-deliverable option (NDO)
Goldman Sachs Group has partnered with institutional blockchain and cryptocurrency financial services provider Galaxy Digital to execute its first OTC crypto in the form of a Bitcoin non-deliverable option (NDO).
This marks the first OTC crypto transaction by a major bank in the US market and is also testimony of investment banks expanding their cryptocurrency offerings and adopting digital assets. The trade also represents a continuation of the bank's partnership with Galaxy Digital to deepen its crypto capabilities, which included facilitating Goldman's first CME Group Bitcoin futures transaction last year.
Galaxy Digital's trading platform is focused on the digital-asset market, offering clients deep, liquidity across a variety of centralised exchanges and OTC markets. The firm has strong capabilities in moving capital and assets securely and efficiently through relationships with spot and future exchanges, digital asset exchanges, custodians and fiat banking partners,
Galaxy's trading platform provides liquidity in over 100 digital assets, with a consistent focus on the expanding needs of counterparties in the digital assets sector. Galaxy works with over 690 institutional trading counterparties and added 43 new relationships in the third quarter of last year.
The firm teamed up with Bloomberg in the summer of 2021 to launch the Bloomberg Galaxy DeFi Index (ticker: DEFI).
FTX launches platform offering institutional-grade products and advisory services
West Realm Shires Services and FTX Trading Limited, the companies behind FTX US and FTX.COM respectively, have launched FTX Access, a new platform offering advisory services, index products, trade execution, analytical tools and capital introductions for institutional investors interested in gaining exposure to digital assets.
‘The role crypto plays in the global financial landscape continues to expand, and with that comes an influx of institutions looking to add crypto to their balance sheets,’ said Sam Bankman-Fried (right), CEO of FTX. ‘Our goal is to provide services that make it easier for traders at all levels to invest in cryptocurrencies, while also meeting compliance and regulatory standards found in traditional finance.’
The firm will explore offering custody, derivatives, structured products and other asset management products in a second stage of development.
FTX has also appointed Gustavo Miguel as US Head of FTX Access to direct the growth of FTX Access' US operations and position the company to ‘bring industry-leading products to market in a regulatory compliant manner’.
Prior to FTX Access, Miguel was a founding member of Coinbase Risk Strategies, where he was global head of derivatives. Before Coinbase, he ran global trading at Passport Capital and also worked for Morgan Stanley Institutional Equities, where he managed a proprietary portfolio, specializing in derivatives. Miguel will be joined by Jon Cheesman, global head of FTX Access, who has been responsible for growing FTX's OTC client services.
Struct Finance secures US$3.9m for structured products in DeFi
DeFi protocol Struct Finance has announced the completion of a US$3.9-million seed round to develop the tools to allow the ecosystem to customise, compose and invest in decentralised structured products.
Struct Finance will use this fresh injection of capital supported by 24 companies to build the tools for institutions to customise interest rate products and compose them with options to construct structured products to address the risk profiles of different investors.
Structured products have been growing in popularity and gained traction in decentralised finance (DeFi), predominantly in the form of covered calls and cash-margined puts.
‘With the emergence of derivatives in the crypto markets, structured products are a natural evolution for the space,’ stated the firm. ‘Today, many of the parameters available on different derivative instruments are static in nature, predominantly set by protocol developers and leaving investors with no choice but to take it or leave it.’
According to Struct Finance, many of the protocols offering these instruments experience fragmented liquidity as a result of having multiple maturity dates but continue to utilise conservation functions, resulting in either high slippage or considerable changes to discount rates if larger volumes are transacted under low market depth.
The team is currently launching on the Avalanche network but intends to expand to other Ethereum virtual machine-compatible chains in the near future.
CME rolls out micro-sized BTC and ETH options
CME Group is planning to launch options on micro Bitcoin and micro Ether futures on 28 March, pending regulatory review.
The new micro Bitcoin and micro Ether options contracts will be one-tenth of their respective underlying tokens in size and will offer institutional investors and ‘sophisticated, active, individual traders’ with more ways to manage their exposure to the top two cryptocurrencies by market capitalisation.
These contracts will complement the existing Bitcoin options contracts, sized at five bitcoin and launched in 2020. The new contracts will also allow investors to express long- or short-term views with a choice of monthly as well as weekly options expiries.
‘At less than a year old, nearly 5.2 million combined micro Bitcoin and micro Ether futures contracts have changed hands,’ said Tim McCourt (right), global head of equity and FX products, CME Group. ‘Building on the strength and liquidity of the underlying contracts, our micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure.’
Thetanuts to build DeFi structured products platform
Thetanuts Finance has raised a US$18m investment in a seed round led by Three Arrows Capital, Deribit, QCP Capital, and Jump Crypto.
The funding will be deployed to develop Thetanuts Finance's structured products platform and user-friendly instruments in the crypto derivatives ecosystem. The firm’s team of hedge fund managers, financial analysts, and smart contract developers have introduced two proprietary additions to the platform is - the Theta-Index and Theta-Wheel, two decentralised finance products that are the first of their kind.
The Theta-Index is an option basket designed to giving everyday investors ‘more well-rounded risk management’, while Theta-Wheel, are physically settled vaults that alternate between calls and puts, allowing investors to "buy low and sell high" while earning premiums.
Thetanuts is seeking to enable projects to place their native tokens in the options market with ease and offers structured products that accept tokens from 11 chains as collateral. This gives users access to competitive risk-adjusted yield opportunities while creating new options markets for native tokens across multiple blockchains.
The US$18 million capital infusion will go toward Thetanuts Finance's efforts to create DeFi structured products.