Global investment firms and cryptocurrency exchanges are rushing to develop new digital asset markets in preparation for impending regulations. Announced on July 31, 2018, SBI Holdings invested $9 million in Clear Markets to create a cryptocurrency derivatives trading platform.
SBI Crypto Investment Makes First Move
Japanese financial services powerhouse SBI Holdings invested 1 billion yen (~$9 million) in Clear Markets to develop a cryptocurrency derivatives platform for institutional investors, reports Nikkei Asian Review.
Based in North Carolina, Clear Markets is a developer of digital marketplaces and trading technologies. SBI Crypto Investments confirmed its purchase of a 12% stake in Clear Markets on Monday. The price per share was not disclosed.
Through its Clear Markets investment, SBI plans to deliver several new investment products tied to the price movement of cryptocurrencies in the form of swaps, futures, and options. With the availability of cryptocurrency derivatives, institutional investors will have key safeguards against direct cryptocurrency investing – avoiding the safekeeping of private keys and eliminating the risk of exchange hacks.
Currently, only two regulated cryptocurrency derivative markets exist in the U.S., Chicago-based CBOE and CME futures exchanges, which offer Bitcoin future contracts.
While institutional investors can trade OTC-listed cryptocurrency investment products, such as Grayscale’s Bitcoin Investment Trust and Ethereum Investment Trust, no custodian solution exists on primary public exchanges as of yet.
Institutional Investor Interest is on the Rise
On July 27, Nasdaq held a closed-door meeting with traditional exchange and cryptocurrency company executives to discuss the future of the nascent sector.
Among the attendees were Gemini exchange co-founders, Tyler and Cameron Winklevoss who joined half a dozen other company representatives to discuss the implications of future cryptocurrency regulations and what tools and surveillance technologies would be required in the onset of regulated security token markets.
On August 1, Bitcoin Billionaire Mike Novogratz’s merchant bank Galaxy Digital LP listed on Canadian stock exchanges. The stock is currently available for trading on Canada’s TSX Venture Exchange (TSX-V).
Considered the “Goldman Sachs of Crypto,” Galaxy Digital will invest in cryptocurrency and blockchain companies, trade digital assets and offer advisory services.
Cover Photo by Piron Guillaume on Unsplash