TP ICAP’s digital assets business aims to extend its trades on crypto asset equity instruments to US exchange-traded funds after completing the first trade of this type with Goldman Sachs this month.
The interdealer broker and market infrastructure provider’s digital assets business traded German-listed BTCetc, ETC Group’s Physical Bitcoin exchange-traded crypto product, on an outright basis against CME Group’s Bitcoin future in the form of an EFP (exchange for physical). Crypto ETP market makers DRW, Flow Traders and Jane Street provided liquidity.
TP ICAP’s Digital Assets business has hit another milestone as it completes its first trade on crypto asset equity instruments with @GoldmanSachs and leading market makers. Read more here: https://t.co/DjrMCfQKa8
— TP ICAP Group PLC (@TPICAPGroupPLC) January 10, 2022
Max Minton, APAC head of digital assets at Goldman Sachs, said in a statement: “Institutional demand continues to grow significantly in this area and this partnership will help us expand our capabilities to serve our clients.”
Simon Forster, co-head of digital assets at TP ICAP, told Markets Media that ETPs and futures are very well understood by the firm, whether they reference bitcoin, gold, another asset or an index.
“Since the start of the digital asset business we have focused on providing our clients with access to the crypto market through familiar products and with familiar providers,” he added. “They are the building blocks of a healthy liquid ecosystem that we see in other asset classes at TP ICAP which is why it is so encouraging to see these products being packaged together.”
He continued that the trade and the profile of firms involved speaks to the increased institutional interest in crypto and maturation of the asset class.
TP ICAP is based in the UK but also has a footprint in the US and in Asia. Forster said the firm wants to offer the same product range in all three regions.
“US crypto ETFs are undoubtedly going to grow so it’s really important that we serve clients on these products on the ground in the US,” Forster added.
The US Securities and Exchange Commission has approved ETFs on bitcoin futures but not on spot bitcoin ETFs. TP ICAP found there was a meaningful increase in the volumes of CME bitcoin futures following the SEC approvals of the first US bitcoin futures-based ETFs in October 2021.
Forster expects the next focal point of the crypto market to be over-the-counter derivatives such as non- deliverable forwards, OTC options and total return swaps which are very important in other asset classes handled by TP ICAP.
“We are doing a lot of work internally around these products to ensure we can satisfy our regulatory obligations such as reporting,” he added. “We are really focused on doing what we can in our role as an intermediary to help put that framework in place for clients.”
By the end of this year Forster…