TP ICAP and Fidelity are launching a crypto exchange for big players – a sign that institutional interest is sticking

Bitcoin logo mining hand person
Bitcoin shot up in the first months of 2021 before tumbling in May.

  • TP ICAP is launching a crypto exchange aimed at big players such as hedge funds and investment banks.
  • The major financial broker has teamed up with Fidelity and Standard Chartered-backed Zodia Custody.
  • It is a sign that institutional interest in bitcoin and crypto is sticking, despite the fall in prices.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Market infrastructure company TP ICAP is launching a cryptocurrency exchange aimed at investment banks, hedge funds and other financial institutions, in a sign that big players are still keen on digital assets despite the recent plunge in prices.

Fidelity Digital Assets and Zodia Custody, which was launched by Standard Chartered, have also backed the project and will provide custody services, the companies said Tuesday.

“Client demand to trade spot crypto assets is significant and growing,” said Simon Forster, co-head of digital assets at TP ICAP, cited in the companies’ announcement. “But to date many of our clients have been prevented from accessing crypto asset markets due to current limitations in market infrastructure.”

It is a sign that major players in financial markets remain interested in crypto assets, despite bitcoin’s slide from close to $65,000 in May to around $35,660 on Tuesday.

Institutional investors are put off by the design of crypto exchanges where trading and storage are done in the same place, TP ICAP said.

It hopes its new crypto-trading platform will appeal to big players by giving them access to liquid trading in bitcoin, ether and other crypto tokens, as well as storage for their assets at separate custodians.

TP ICAP, a global company that facilitates transactions between financial institutions, said the trading platform will be made available to its customers around the world. It will aim to provide the market standards and trading infrastructure viewed as a minimum in traditional markets, it said.

Fidelity sees the joint effort as key to bringing more big players on board with crypto assets. “Collaborating with industry leaders like TP ICAP to bring to market innovative solutions that strengthen the digital assets ecosystem is critical to enabling even more institutional participation,” said Chris Tyrer, head of Fidelity Digital Assets in Europe.

The new platform has already started to onboard customers, but its operation is subject to approval by the Financial Conduct Authority in the UK, where TP ICAP is based.

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NYDIG partners with banking platform Q2 to enable bitcoin trading for 18 million users

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Cryptocurrency custody firm NYDIG has partnered with digital banking platform Q2 to enable over 18 million of the bank’s US account holders to buy, sell, and hold bitcoin.

Q2, founded in 2004, powers nearly 30% of the top 100 banks in the US, according to the statement. It also enables one in 10 digital banking customers to transact via the cloud.

The partnership, announced Thursday, aims to serve the growing number of Americans who own cryptocurrency, Jonathan Price, EVP at Q2, said.

He cited a December 2020 study by Cornerstone Advisors, which found that 15% of US consumers own cryptocurrencies. The majority of those, the study revealed, would prefer to use their banks to invest if given the choice.

The collaboration will be powered by NYDIG’s regulated bitcoin platform, the statement said. The company, founded in 2017, is the bitcoin subsidiary of Stone Ridge, a $10 billion alternative asset manager.

In May, NYDIG teamed up with fintech company Fidelity National Information Services to enable banks to offer cryptocurrencies.

Banks have been moving to offer bitcoin services because they are seeing customers sending money to crypto exchanges such as Coinbase, according to Yan Zhao, president of NYDIG.

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NYDIG partners with digital bank Q2 to enable bitcoin trading for 18 million users

GettyImages 942027334

Cryptocurrency custody firm NYDIG has partnered with digital bank Q2 to enable over 18 million of the bank’s US account holders to buy, sell, and hold bitcoin.

Q2’s platform, founded in 2004, powers nearly 30% of the top 100 banks in the US, according to the statement. It also enables one in 10 digital banking customers to transact via the cloud.

The partnership, announced Thursday, aims to serve the growing number of Americans who own cryptocurrency, Jonathan Price, EVP at Q2, said.

He cited a December 2020 study by Cornerstone Advisors, which found that 15% of US consumers own cryptocurrencies. The majority of those, the study revealed, would prefer to use their banks to invest if given the choice.

The collaboration will be powered by NYDIG’s regulated bitcoin platform, the statement said. The company, founded in 2017, is the bitcoin subsidiary of Stone Ridge, a $10 billion alternative asset manager.

In May, NYDIG teamed up with fintech company Fidelity National Information Services to enable banks to offer cryptocurrencies.

Banks have been moving to offer bitcoin services because they are seeing customers sending money to crypto exchanges such as Coinbase, according to Yan Zhao, president of NYDIG.

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Bitcoin traders are piling into bets that the price will drop below $40,000 by next month after Elon Musk’s tweet-storm

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Bitcoin has tumbled in recent days after criticism from Elon Musk.

Bitcoin options traders have piled into bets that the world’s biggest cryptocurrency will fall below $40,000 by next month following an Elon Musk tweet-storm that sent the price tumbling to around $45,000 on Tuesday.

One exchange chief executive said there was little sign of a “buy-the-dip” mentality among bitcoin traders and investors appeared to be a lot more pessimistic this time around than after previous price falls.

There was a spike in activity on bitcoin derivatives markets on Monday, with the majority of flows going into bearish options, according to figures from data provider Skew.

Around $3.5 billion worth of options contracts changed hands after Musk suggested Tesla might sell its bitcoin holdings, compared to under $1.5 billion of trading volume on Friday. Musk’s tweets sent bitcoin tumbling as low as $42,100 before it rebounded somewhat, well off April’s record high of close to $65,000.

Data showed high trading volumes for put options with a strike price of $40,000 – effectively bets that the bitcoin price will fall below that level. A put option gives the buyer the right, but not the obligation, to sell an asset at a specified price within a set time period.

There was more than $130 million worth of open interest in $40,000 put options with a June 25 expiry date on Tuesday, according to bybt.com. That suggested a considerable number of options traders were betting the price would fall sharply by then.

“Yesterday we saw a lot of volume in the $40,000 puts,” Pankaj Balani, chief executive of crypto derivatives exchange Delta, told Insider.

Balani also said investors were reducing the level at which they were buying call options – effectively bets that the price will rise – suggesting pessimism about the outlook for bitcoin.

“In the previous dips, we had seen that the sentiment had not changed as much. This time around, we are seeing change of sentiment. We’re not seeing any signs of bottom-fishing,” he said.

“Consensus seems to be that it’s fallen quite sharply and it can fall a little more. So $35,000 to $38,000 is the zone where most traders are looking at.”

Options traders who had sold puts at around $40,000 – effectively taking the position that the price would not fall below that level – were now buying puts to cover their positions, Balani said.

The crypto exchange boss said action in the options market suggested bitcoin will remain range-bound between $35,000 and $50,000 until June.

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Trading of first bitcoin ETF slows in Canada after a roaring debut for the groundbreaking fund

A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph
A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course’s graph

  • The Purpose Bitcoin ETF during its first two days of trading saw nearly $400 million of shares change hands. 
  • But on Tuesday, Bloomberg reported the amount slumped to just $17 million. 
  • Buzz has also quieted down around Evolve Fund Group’s Bitcoin ETF, which launched a day after BTCC. 
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Just a few weeks after the first exchange-traded fund in North America made a roaring debut, the excitement looks to be waning. 

The Purpose Bitcoin ETF, which trades under the ticker BTCC, on Tuesday saw $17 million shares change hands, according to Bloomberg. That is compared to its first two days of trading, which saw $400 million of shares traded. 

In total, the long-awaited ETF has attracted over $500 million in assets. However, the recent steep decline may suggest the fluctuating levels of interest in bitcoin, which many view as a hedge against inflation.

“The initial surge in interest was evidence of some combination of pent-up demand, investors switching from other means of getting bitcoin exposure, and the fact that bitcoin’s price was notching new highs as the Purpose ETF began trading,” Ben Johnson, Morningstar’s global director of ETF research, told Bloomberg. “Longer term, I expect volumes will be correlated with bitcoin’s price.”

Buzz has quieted down around as well for Evolve Fund Group’s Bitcoin ETF (ticker EBIT), which launched a day after BTCC. Around $3 million shares traded on Tuesday, far less than the $15 million right after its release, according to Bloomberg.

Bitcoin had an epic run in February, touching the $1 trillion market capitalization mark and breaching the $58,000-level.

“This is a great time to be in crypto. We are seeing genuine adoption of this amazing technology, said Bitfinex CTO Paolo Ardoino. “If you look back at 2017 the capacity of the network was nowhere near what it is now.”

In the US, CBOE Global Markets filed with the Securities and Exchange Commission on Monday seeking approval to list shares of VanEck’s bitcoin ETF. It is among the latest attempt to launch a bitcoin ETF in the US.

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