Nomura’s economic advisory arm, Nomura Research Institute, launched a crypto-asset index in 2020. Japan’s Nomura Holdings Inc. began trading bitcoin derivative contracts with its Asian clients following a ‘significant’ increase in institutional demand. The derivative contracts available are futures contracts and options contracts.
Nomura plans with Bitcoin derivatives
Tim Albers, leader of forex structuring in Asia, said Nomura will offer futures contracts and options on the bitcoin cryptocurrency, which are explained in detail below.
The first transaction at Nomura was facilitated by the CME Group Inc. platform. with Cumberland DRW LLC acting as the cryptocurrency market maker, as they specialize in bitcoin and other cryptocurrency-based financial derivatives. Nomura launched this action at a time when many are afraid of an upcoming bear market.
According to Albers, there has been significant volatility recently. Once settled, valuations will be more attractive to institutional clients. They expressed their enthusiasm to start this project. They also noted that this proposal would begin their journey into the cryptocurrency space.
Albers explained that Nomura expects the market to “mature“with time. This allows regulators to engage more with the ecosystem. This will make it more attractive to long – term investors.
What are Bitcoin Derivatives?
For these derivatives, the bitcoin asset is never traded. Only the amount invested in the derivative is traded. Options contracts give an investor the right, not the obligation, to buy an underlying asset. Futures contracts create an obligation for the investor to buy or sell the underlying asset, and futures contracts are a binding agreement between two parties to buy or sell the underlying asset at a fixed price.
Options allow investors to trade volatility directly and hedge against downside risk, said Rig Karkhanis, Asia ‘s global market leader for the bank.
Nomura plan for crypto-asset expansion
Nomura is consolidating its resources within its Singapore-based FX team and digital office for the expansion of encryption in its global markets segment. The digital office created in 2018 identifies and implements new technology-led revenue opportunities. This included digital assets, artificial intelligence and support for its e-commerce platforms. The brokerage plans to expand its trading capabilities into other global markets over time.
The expansion of Nomura comes as crypto firms come under increasing scrutiny from U.S. authorities. Cryptocurrencies and other risk assets are also under pressure after the Federal Reserve and other central banks raised interest rates to combat inflation. This has created an unfavorable environment for these assets.
In October, Nomura accepted a third-party share allotment from Crypto Garage Inc., which offers blockchain-related settlement services in Japan and overseas. Its custodial business Komainu digital assets, founded by Ledger and CoinShares partners, raised $ 25 million in capital in March 2021.
So, this seems like a big step for crypto enthusiasts in Japan. The new project enables a whole new experience and opportunities for merchants. As expected, Japanese brokerage could expand its access to its customers worldwide. The prospects for the future seem to be on track.
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Interested in investment and financial markets after a business school in Chambéry, the passion for cryptocurrencies was evident. The blockchain is definitely the universal tool of tomorrow.