The cryptocurrency markets experienced their first sustained rally since March as most digital assets began to bounce back from their low levels of the last few months.
In July, bitcoin and ethereum closed the month at US$23,310 and US$1,679, rising 22.0% and 62.8%.
Singapore-based OrBit Markets, an institutional liquidity provider in crypto options and structured products, has raised US$4.6m in an angel funding round led by digital assets financial services platform Matrixport, Brevan Howard Digital, New Form Capital, Maven 11 and Westridge Markets – the round was oversubscribed.
Founded this year by a team of former leaders of Deutsche Bank’s top-rated currency division, OrBit has built quantitative models and risk engines which allow it to provide liquidity across the entire spectrum of option products from basic vanilla options to the most exotic structures.
In partnership with CeFi platforms and DeFi protocols, OrBit has launched several products aimed at investors seeking for safer investing and hedging solutions following the recent market turmoil.
As the digital assets market evolves, more investors and DeFi users are exploring advanced options strategies for investment and yield enhancement, but few market makers are able to provide liquidity in these complex products, according to Caroline Mauron (right), CEO and co-founder of OrBit.
‘Even in traditional finance, such capabilities are concentrated in the hands of a few global investment banks. [We want] to bridge this gap by bringing decades of derivatives expertise to the crypto market,’ she said.
The funding will be used to accelerate the development of the company’s proprietary technologies, while enabling it to expand its business footprint, scale its client base and bring to market new structured products.
SIX crypto trading volume down by 50%
Crypto trading activity in Switzerland’s main stock exchange experienced a sharp decline in July 2022, according to SIX’s latest report.
SIX has reported bleak trading activity in relation to crypto products with volumes aggregating to CHF77.2 billion (US$ 82.19 billion), the lowest level so far this year in terms of both trading turnover and number of transactions.
As volatility dropped to levels below the peaks of 2021, trading activity on SIX Swiss Exchange also stabilised in Q2 22.
According to the report, trading turnover at the exchange’s venues, including on SIX Structured Products Exchange, had a combined nominal value of less than US$81 billion, at today’s rates, in July. This figure was down by 21% from CHF97.8 billion in June 2022.
In terms of the total number of transactions, the volumes were numbered at 4.12 million, also a loss of 16% month-on-month compared to 4.9 million transactions reported for June 2022.
SIX remains a popular destination for crypto listings with the Zurich-based market operator reporting a trading turnover of CHF100.9m (US$105m) for crypto products listed on exchange, down from CHF170.5m the previous month. In total, 186 products were traded and 8,286 transactions concluded. The highest turnover was recorded by the 21Shares Ethereum ETP with CHF14.8m; the most transactions were recorded also by the 21Shares ETP with 1,560 trades.
The SIX exchange infrastructure was deployed to launch five new crypto products including the ETC Group Physical XRP ETP, Pando Asset Crypto 6 ETP, Long Mini-Future on Bitcoin Future, Long Mini-Future on Ether Future and Risk Controlled Ethereum Index ETP.
Click in the link to read the SIX crypto products July report.
US crypto network rolls out market neutral yield token
Index Coop, a US asset management and decentralised network project offering crypto index products, has rolled out a tokenised strategy that gives holders access to a source of USD-denominated yield by executing a basis trading strategy on Perpetual Protocol's Optimism market.
Perpetual Protocol is a software that seeks to incentivise a distributed network of computers to operate an exchange where users can buy and sell derivative contracts.
The new Market Neutral Yield Token (MNYe) contains a fully hedged ETH position, with equivalent spot exposure and short exposure via perps. Token holders will earn a variable USDC return when the funding rate is positive, while removing all exposure to price volatility of the underlying asset.
The MNYe product takes simultaneous long spot and short perpetual positions and derives yield from the funding rate, which is generally paid by long perp positions to short perp positions. By taking a fully hedged position, the product has no net asset price exposure. MNYe will use a 1x long ETH spot position and a -1x short ETH perp settled in USD. The yield will be further enhanced by thrice-daily auto-compounding when the USD funding balance is positive. The yield is used to maintain a leverage position between -1x and -2x.
Basis trading, also known as cash and carry arbitrage, is an established strategy for achieving price-neutral profit by arbing the difference between an asset price on the spot and near-term futures markets. In DeFi, perpetual swaps – also called perpetuals or perps – can be used in lieu of futures. First implemented by Bitmex, perpetuals are futures with no settlement date.
BlackRock, Coinbase partner to provide crypto trading and custody
Coinbase is partnering with BlackRock to provide institutional clients of Aladdin, BlackRock’s end-to-end investment management platform, with direct access to crypto, starting with bitcoin, through connectivity with Coinbase Prime.
Coinbase Prime will provide crypto trading, custody, prime brokerage, and reporting capabilities to Aladdin’s Institutional client base who are also clients of Coinbase.
Built for institutions, Coinbase Prime provides advanced agency trading, custody, prime financing, and staking, as well as staking infrastructure, data, and reporting that supports the entire transaction lifecycle.
“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” said Joseph Chalom (right), global head of strategic ecosystem partnerships at BlackRock. “This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.”
Coinbase has just reported a second consecutive quarter of losses, driven by the spring meltdown and the arrival of the crypto winter. Coinbase has lost US$1.1bn, or US$4.98 a share, in the second quarter, compared with a profit of $1.6bn, or $6.42 a share, a year ago, the company said yesterday (9 August).
Nimbus debuts derivative NFT play on its DeFi platform’s blockchain
Nimbus Platform IO, a blockchain-based company that specialises in DeFi solutions, has launched the second iteration of its n-NFT as a structured derivative product.
The Smart-Staker n-NFT is a portfolio-enhancing yield-generating structure offering a hedge against price fluctuations – the product also offers structural diversification as the yield generation is derived from four different decentralised application (Dapps) activities.
Before launching Smart Staker n-NFT, Nimbus launched Smart LP n-NFT focused on lending, liquidity providing, and LP staking using dApps and other tools on its pPlatform.
The second-generation n-NFT has been introduced to improve user-friendliness and solve users’ needs.
Smart Staker n-NFT includes a yield-generating mechanism, which allows holders to receive rewards from the best staking options. The threshold set for Smart Staker n-NFT is 1BNB or 200 BUSD.
Once the NFT is minted, the underlying assets are automatically attached to the Smart Staker, sending them to two revenue streams — Soft Staking and CAKE-BNB LP Staking.
The new Smart Staker n-NFT is available on the firm’s Nimbus Platform Dapps and products.