Japan’s financial services giant Nomura has launched its bitcoin over-the-counter derivatives amid a crisis in the cryptocurrency market. Please note that these products are intended for institutional clients.
Nomura, BTC over-the-counter derivatives for institutions
Recently, we were told that Nomura had gone on an address that derived bitcoin over the counter. This is done to provide over-the-counter bitcoin futures and options to institutional investors. Some media have reported that these bitcoin derivatives will not be deliverable and that payments must be made in cash.
Very quickly, these new items won over Nomura customers. To name only Cumberland DRW who made the first transactions on behalf of Nomura on the CME.
Rig Karkhanis, Nomura’s market leader for Asia and Japan (AEJ), immediately said:
” By working with these institutional grade counterparties we will be able to meet the growing demand from our clients. »
Bitcoin derivatives and the collapse of crypto markets
Over-the-counter BTC derivatives do not know crises because they are loved by institutional investors. Their demand for such services has steadily increased. This has forced global investment banks to become much more involved in the sector.
Probably, the current collapse of the cryptocurrency market, causing a loss of 300 billion dollars in just 4 daysquench the thirst for regulations.
Suddenly Tim Albers, Head of Forex Structures, AEJ (Nomura), became an industry regulation evangelist. Here is what he said:
” We expect the industry to mature over time as it becomes more regulated, making it more attractive to an institutional investor.. »
But he was not shy about thouting over-the-counter bitcoin derivatives Nomura. In his eyes, the latter lacks legitimacy in a context where the price of bitcoin has halved, since $ 69,000 last November.
” There has been significant volatility recently. Once the dust has settled, valuations will be more attractive to institutional clients. We are very pleased that this launch marks the beginning of our journey into space for the business of global markets. »
Who is Nomura?
Attracted by digital assets in 2018, Nomura becomes a cryptocurrency savings bank by creating Komainu. It partnered with Ledger (providers of security solutions and crypto infrastructure) and Global Advisors (an investment manager specializing in bitcoin) to execute the plan.
Despite its best efforts, Nomura (via Komainu) was unable to resolve storage and security issues that affected large-scale investment bankers ’cryptocurrency investments. However, the move was intended to unlock the interest of institutional investors in crypto assets.
2 years later, Nomura releases its custodial service to traditional investors. Always through the new company mentioned above, backed by Ledger and CoinShares. Which allowed Komainu to offer itself the status of the first digital asset retention control solution. She was taken by institutions of institutions.
What about the OTC or Other Counter (OTC) market?
Before you explain the over-the-counter markets, know that financial markets are divided into two blocks: organized markets and unorganized markets. The Over The Counter incorporates this second type of market.
So in an over-the-counter market, expect fewer regulations on trading financial instruments as a standard. Admittedly, over-the-counter markets are unknown to the public, but they take advantage of the lack of centralization and formation based on agreements between the participants.
Its characteristics are:
- transactions based on contracts between 2 parties;
- operations based on electronic or telephone communications (centralized exit platforms);
- close monitoring of participants.
It should not be forgotten that the OTC market operates only in the presence of a counterparty (natural or legal person who sets his own prices or ” market makers Forcing the buyer or seller to contact him through a broker before buying at the sale price or the purchase price.
Note that over-the-counter markets have many advantages and disadvantages. But keep in mind that they allow a wide range of financial products to be traded like bitcoin derivatives over the counter.
We are far from exhausted by the long and complete information about the OTC market. Here is a link to a comprehensive article on this topic, dear readers Cointribune. Otherwise, it is a sign of hope to know that the crypto machine is still running backed by OTC Nomura bitcoin derivatives.
Sources: Admiral Markets; CryptoPota
Get a summary of news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss any of the essential Cointribune!
The blockchain and crypto revolution is underway! And on the day when the impacts on the most fragile economy in this World are felt, against all odds, I will say that I was involved.