Mike Novogratz’s Galaxy Digital is planning to launch crypto options contracts trading as it joins the current market trend of moving towards derivatives trading.
With more institution investments interested in cryptocurrency, Galaxy Digital has said that it is responding to inquiries from both crypto and non-crypto firms in hedging against crypto assets volatility, often a barrier to new companies joining the market.
In finance, an option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price prior to or on a specified date, depending on the form of the option.
An encouraging word from Chicago Mercantile Exchange (CME) for the markets is that the long-awaited interest among institutional investors appears to be gaining ground; an observation also shared by JPMorgan Chase (JPMC) executive Nikolaos Panigirtzoglou who said that such investment was beginning to impact on Bitcoin markets. Bitcoin futures are standardized contracts that bind a party to buy or sell Bitcoin at a predetermined date.
Yoshi Nakamura, global head of business development at Galaxy Digital said that some recent interest in this type of trading is coming from mining firms and from lenders although he admits the move into crypto options contracts trading is still relatively new.
BTC futures traded at around USD 10,000 yesterday on the CME showing such trading is on the up. Akuna Capital and Cumberland, the Chicago-based cryptocurrency trading unit of DRW Holdings LLC, are other companies currently supported by over-the-counter (OTC) trading.
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