Genesis Global Capital, a cryptocurrency brokerage firm, has announced that it has completed a unique trade that will open the door to new institutional crypto futures products.
Genesis executed the first ever over-the-counter block trade (OTC) of a Basis Trade at Index Close transaction (BTIC). The transaction was made using Bitcoin futures contracts from Chicago Mercantile Exchange. According to a Sept. 26 statement, the trade was executed in collaboration with Akuna Capital, a derivatives market maker.
As it is used more often in equity markets, this is the first use of a BTIC for cryptocurrency. This type of trading allows investors the ability to trade futures contracts at prices that are based on the index’s end-of-the-day close.
CME Group Global Head Equity Index and Alternative Investment Products Tim McCourt stated that this product would offer greater exposure to CME’s Bitcoin derivatives or Ethereum futures. The Ether contracts were launched in February. He explained the benefits of the new trading vehicle.
BTIC allows market participants to trade the basis more efficiently, while also providing a regulated marketplace that provides real-time price discovery and improved trading precision for institutional players who wish to maximize holdings between futures and spot markets.
CME Group receives liquidity from Genesis for its BTC/ETH futures products and options.
Related:JPMorgan: Big investors shift from Bitcoin to Ether Futures
The CME launched micro Bitcoin Futures in May. These contracts are worth 0.1 BTC. This offering was created to help institutional traders hedge their crypto asset risks.
The product had already traded over a million contracts by June’s end, indicating that institutional investors are still interested in smaller positions in crypto. This product is yet another example of diversifying options for wealthy investors in order to gain exposure to crypto markets.
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