Japanese financial services giant SBBI Holdings invests $9 million in Clear Markets to sponsor the development of a cryptocurrency derivatives trading platform created for institutional investors.
Based on reports, SBI Crypto Investment has acquired a 12 percent share in Clear Markets, which is headquartered in Charlotte, NC and has branch offices in New York, London, and Tokyo. Although the terms of the deal are unknown, the publication notes that SBI possibly paid 1 billion yen ($9 million) for its minority ownership position on the firm.
SBI’s aims to sponsor Clear Markets is to create a derivatives exchange that permits institutional investors to trade investment products connected to the price trend of bitcoin and other cryptocurrencies. Such products enable institutions to hedge other positions that they might have in the cryptocurrency market, cutting down risk and allowing them to make more profits or avoid losses.
In addition to the absence of access to regulated custodians, the lack of cryptocurrency derivatives products is usually mentioned by institutional investors as a reason why they feel uncertain about investing in the cryptocurrency market.
Currently, the U.S. is home to two regulated exchanges, CBOE and CME both based in Chicago. Cryptocurrency trading platform LedgerX provides institutional investors with various alternative derivatives products, such as calls, puts, and day-ahead swaps, but it still has to have consistency and meaningful volume.
However, industry analyst is sure that things will take a different turn next year, as a result of the entrance of new custodians in the market and the creation of new platforms that offer institutions with more flexibility in how they gain exposure to cryptoassets.
SBI recently became the first banking institution to directly launch a cryptocurrency exchange.