Digital Asset Research’s Post

As part of our ‘DAR In Conversation’ series, we spoke with Rafael Zanatta, Crypto Equity & Index Derivatives Sales at Eurex, to learn about finding a trusted path in the crypto derivatives space. To read the full interview transcript or watch the video, click here: https://loom.ly/hkPuel8 #digitalassets #crypto #tokenization #drivenbydata #governance

LSEG’s #LCH gets regulatory approval to clear #Bitcoin index #derivatives Today the London Stock Exchange Group’s (#LSEG) LCH SA announced it received regulatory approval to provide clearing services for Bitcoin Index futures. It’s been almost a year since LCH revealed plans to provide central clearing for UK-regulated digital asset exchange GFO-X. LCH launched a fully segregated division, LCH DigitalAssetClear, which includes a separate default fund and dedicated clearing rules. It plans to launch the clearing service later in 2024. https://lnkd.in/eKXqR8VB

🌐 The financial landscape is experiencing a seismic shift with the meteoric rise of options trading, becoming a favored strategy for both retail and institutional investors. A recent article sheds light on how this growth is not just a trend but a transformative force in the market dynamics. Here are some intriguing revelations that spark curiosity and reflection: 📈 Global options trading volumes surpassed futures for the first time in 2021, indicating a significant shift in investment preferences towards options trading platforms. 🚀 The growth in traditional options markets is mirrored in the crypto sector, with substantial increases in BTC and ETH options volumes on the CME, showcasing a burgeoning interest in digital asset options. 💰 As the traditional finance system grapples with escalating costs and complexities, the options market presents a prospect for innovative investment opportunities in the crypto space. 🔮 On-chain options trading emerges as a transparent, inclusive alternative to traditional finance, offering streamlined processes and new avenues for institutional adoption. 🔍 The evolving narrative of options trading from conventional to crypto realms speaks volumes about a financial future built on-chain with broad institutional acceptance. 🔒 However, bridging the gap between institutional acceptance and DeFi innovations remains crucial to realizing the full potential of on-chain options trading in the financial landscape. 👉 For more insights on the growth and evolution of derivatives markets, dive into the full article linked in the comments below. #Finance #OptionsTrading #Crypto #MarketTrends https://lnkd.in/dPMbWYPF

Sharing my perspectives from today's Architect Partners Insights #CryptoPublicCompaniesSnapshot. Building a business in crypto is hard, even for the most reputable and well positioned TradFi companies. Last week, Cboe Global Markets (CBOE) announced their plans to wind down Cboe Digital's Spot Market in Q3 2024 and to transition digital asset derivatives trading and clearing into existing derivatives and clearing business lines. Cboe was one of the #EarliestTradFiAdopters of BTC, launching BTC Futures Trading in Dec 2017. Cboe then made one of the most significant Bridge M&A transactions in crypto by acquiring ErisX in Oct 2021, paving the way for the launch of Cboe Digital with digital asset spot, derivatives and clearing capabilities. We constantly say in M&A that timing is one thing that none of us can control and nine months later, Cboe wrote down $460M on the ErisX acquisition, defensibly as we were in the heart of the #GreatPurge. Despite the write-down, Cboe launched margined BTC and ETH futures in Jan 2024. We highlight the Cboe Digital journey because there are real consequences and implications for the #politicized, #directionless, #paralyzed, [#enteryourpreferredadjective] and #completelyinept state of U.S. regulation that plagues our industry. For 50 years, Cboe has done it the right way for all other products they service. If one of TradFi’s most successful exchanges can’t operate within today’s U.S. crypto asset framework, what choices must other high quality businesses make? — Coinbase’s Quarterly Shareholder Letter is now required industry reading and the biggest takeaway is Q1 Adjusted EBITDA was $1.0B – more than FY 2023. Coinbase also announced their integration of #BitcoinLightning through the important work of the Lightspark team. This is a very important step towards the BTC as a medium of exchange use case. MicroStrategy hosted their #BitcoinforCorporations conference this week, where they unveiled #MicroStrategyOrange, an enterprise platform for building decentralized identity (DID) applications on the Bitcoin blockchain. DID will be one of the most important innovations to spawn from blockchain. Also notable is the conference was geared to educate publicly traded companies on, essentially, how to use BTC on corporate balance sheets and for treasury management purposes. Zero companies in the S&P 500 have BTC on their balance sheet today. How many will have some BTC by 2030?  BlackRock (BLK), Hamilton Lane (HLNE), and Tradeweb (TW) participated in Securitize’s $47M round this week, further validating the tokenization of real-world assets trend. I continue to say that 75% of securities will be owned in a digital structure on a blockchain by 2030. Announcements like this will force TradFi companies to get involved with tokenization initiatives, so expect more to come, especially from publicly traded companies who have a lot to lose. https://lnkd.in/eXtmsxQr

🚀 Diving into the evolution of the crypto derivatives market and institutional adoption reveals a captivating story of maturation and growth. Here's a thought-provoking insight from the journey: 🔍 Metaphorically speaking, the rise of institutional interest in cryptocurrencies is akin to a symphony ensemble, where different players harmonize to create a beautiful piece. Similarly, the fusion of institutions and crypto derivatives market orchestrates a melody of diversification and risk management. 📈 The crypto derivatives market is not just a trend but a pivotal player in institutional investment strategies. Trading derivatives provides a shield against market volatility, efficient exposure, robust risk management, and arbitrage potential. 🔄 Derivatives, like the instruments in an orchestra, magnify the depth and complexity of the crypto market, reflecting a sophisticated interplay of risk and opportunity. 📊 As derivatives form a larger part of the cryptocurrency market, the narrative shifts from mere participation to strategic allocation. The landscape evolves, signaling a shared path of growth for both institutional investors and the crypto ecosystem. 🌐 Step by step, regulated exchanges like CME Group pave the way for institutional players, offering a secure bridge to the crypto world while mitigating risks and enhancing accessibility. 💡 Just as a symphony reaches its crescendo through collaboration and harmony, the intersection of institutional investors and crypto derivatives may chart a resounding future for the evolving crypto landscape. https://lnkd.in/dFTGeSqX

🌟 Breaking News: #Ethereum ETF gears up for takeoff! 🚀 After the #SEC's ETH investigation fizzles out, the pathway is clearer than ever. 📊 Could this be the green light the market's been waiting for? Dive into the full story! https://lnkd.in/ew5eJyu3 💼📈 #CryptoNews #ETH #EthereumETF #CoinChapter

What else will push institutional crypto adoption in 2024? I'm delighted to announce Toa Capital Partners alongside DV Trading LLC, Jump Trading Group, Marex, and Wedbush will be supporting Cboe Digital to become the first U.S. regulated crypto native exchange and clearinghouse to offer both spot and leveraged derivatives trading on a single platform, with the vision to unify the crypto spot and futures market. Operating this integral exchange and clearinghouse model also enables Cboe Digital to potentially bring more unique and groundbreaking offerings to the crypto markets. Watch this space. #digitalassets #tradfi #cryptotrading #futurestrading #marketmaking

#Tokenized, Inc: #BlackRock's Plan To Own The Fractionalized World Just one day after the January 11 approval of 11 Bitcoin spot ETFs – including BlackRock’s #iShares #Bitcoin Trust (#IBIT) – by the U.S. Securities and Exchange Commission, BlackRock Chair and CEO Larry Fink sat down with Bloomberg's David Westin to discuss the implications of the world's largest asset manager entering the Bitcoin market.** Not one to mince words, Fink articulated a clear framework for his company's approach to Bitcoin, and furthermore for BlackRock's intention to replicate similar ETF products for other assets. **“If we can 'ETF' a Bitcoin, imagine what we can do with all financial instruments.” Fink continued, speaking about Bitcoin itself, stating “I don’t believe it’s ever going to be a currency. I believe it’s an asset class.” While the BlackRock Chair was not shy about expressing other aspects of the potential build of tokenized, digital markets, these two statements in particular illuminate the coveted path forward for how the biggest institutions intend to carefully integrate Bitcoin into the legacy financial system**. Fink even went so far as to turn the abbreviated noun “ETF," an exchange-traded fund, into a verb, gloating about transmuting the **Bitcoin protocol into just another speculative commodity – all the efforts of miners and nodes across the world to decentralize trust in issuance and settlement reduced to a paper offering by their iShares division. https://lnkd.in/e3n3Sw5G

Embracing Digital Assets by the Buyside: Time to take action? The digital asset trading market is maturing with new regulations in the UK and Europe, attracting institutional investors. This is according to a recent IDX panel on this topic (See below article). Key developments include the establishment of solid regulatory infrastructures and 24/7 trading platforms. Clearing services for digital asset derivatives are being developed to enhance market confidence. Despite regulatory challenges, institutional interest driven by cryptocurrency volatility (and not because of the underlying technology like blockchain or smart contracts) continues to grow. As I have often emphasized, a solid regulatory infrastructure is essential for successful financial innovation in digital assets. Rapid, unregulated changes are not feasible in this market. While regulation progresses at its own pace, firms need to prepare for when it becomes a reality. Buyside firms should focus on supporting multi-asset portfolios, including private markets and digital assets. Although the contribution of digital assets may be small in the short to medium term, this approach will help scale when necessary, signaling readiness to embrace new asset classes. To achieve this, firms require a robust data management framework, adoption of modern architecture to leverage Business Intelligence(BI) and AI tools, and advanced risk analytics. These capabilities include scenario analysis, liquidity analytics, VaR analysis, stress testing, and What-If analysis. #buyside firms – Are you working on supporting 'digital assets'? If not, the time to get started is now. #digitalassets #marketrisk #exanterisk #datamanagement #businessintelligence #ai