Japan’s largest investment bank starts offering Bitcoin derivatives

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Two days ago, Nomura Holdings Inc., Japan’s largest investment and brokerage bank, began offering over-the-counter Bitcoin derivatives to its clients.

Nomura Holdings announced on its official Twitter account that they have launched OTC (over-the-counter) operations and have executed their first Bitcoin futures and option trades with the Cumberland company on CME Group. CME Group is the world’s largest financial derivatives exchange, while Cumberland DRW is a company specializing in trading crypto assets.Tim Albers,

Nomura’s head of forex in Asia ex Japan (AEJ), told Bloomberg in an interview: “Once the dust settles, valuations will become more attractive for institutional clients. We’re pretty excited about getting this off the ground.”

As regulators become more involved in the ecosystem, Nomura expects the market to “mature” over time, which will make it more attractive to investors in the long run.

Speaking about the partnership with Cumberland DRW, Nomura’s head of markets, Asia ex Japan (AEJ), Rig Karkhanis, said in a statement: “Working with institutional-grade counterparties will allow us to adapt to growing demand from our clients.” 

The financial services provider also initially hired Citigroup employees to improve its foreign exchange services. Nomura hopes to expand its business services in London, Singapore, and New York. 

The week that is closing has seen the crypto markets crash as Terra USD, one of the most notorious stablecoins, had to liquidate many of its digital tokens, which had already been dragged down by a sell-off of riskier assets. 

However, many financial institutions in the world are offering customers more services related to cryptocurrencies. This response responds to the demand of institutional investors and private clients to enter a sector that, until recently, was a fast-growing sector. 

For this type of derivative in which Bitcoin is taken as a reference value, Bitcoin is not actually traded. Only the amount invested in the financial instrument is traded, so the “real” Bitcoin is non-deliverable and settled in cash. 

Along with Swiss Bank UBS, Nomura Securities was recently at the center of Wall Street talks. Both financial entities reported cumulative losses of more than $3 billion after the fall of Bill Hwang’s Archegos Capital. The two companies shared their loss, and now it appears that Nomura is ready to leverage digital currencies to regain financial composure.

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