Japanese brokerage giant Nomura debuts Bitcoin OTC derivatives offering amidst market turmoil

Japanese brokerage giant Nomura debuts Bitcoin OTC derivatives offering amidst market turmoil
TL;DR Breakdown
  • Japanese brokerage firm Nomura Holdings has started offering bitcoin derivatives to its institutional clients.
  • The announcement comes as Bitcoin (BTC) is experiencing a significant downturn and has dropped to under $30,000.
  • Clients can participate in the bitcoin futures and options market as Nomura will settle Bitcoin in non-deliverable forward and non-deliverable option cash

 According to a press release published Friday by Nomura, the Japanese firm has started providing bitcoin over-the-counter derivatives to clients, making it the latest major financial institution to enter the cryptocurrency market. The major Japanese financial institution is now offering its institutional clients Bitcoin (BTC) swap trading, as well as options that will settle in U.S. dollars. The move comes as BTC falls to new lows, below $30,000, after dropping 20% in the past week.

According to the Bloomberg article, Nomura conducted the first trade on CME Group Inc.’s platform this week. It has also partnered with market-maker Cumberland DRW LLC. Tim Albers, head of forex structuring in Asia ex-Japan, said:

There has been significant volatility recently. Once the dust settles, valuations will become more attractive to institutional clients. We are very excited to get this off the ground as the launch marks the “beginning of our journey in space” for trading global markets.

Nomura’s venture into Crypto

The Japanese banking giant made an announcement earlier this year of its intentions to venture into crypto. Developing on the same principles pulling in assets from outside Singapore for crypto expansion in global markets.

This is not Nomura’s first foray into digital assets. The Japanese investment bank’s first digital asset transactions, according to Nomura’s head of markets Asia ex-Japan, Rig Karkhanis, were conducted by the CME this week.

Nomura is one of the largest financial institutions in Japan and the world, with over $2 trillion in assets under management. The firm has a strong presence in Asia and is a major player in global markets. Several worldwide investment banks have been attempting to provide more crypto-related services in response to client demand for access to a market that has quickly expanded.

Nomura announces to offer Bitcoin derivatives amid crypto market crash

The announcement of Nomura’s entry into the cryptocurrency market comes as no surprise, as the firm has been actively involved in blockchain and digital asset research and development for some time. However, the timing of the announcement is interesting, given that it comes as BTC experiences a significant downturn, with the price falling below $30,000.Cryptocurrencies have tumbled this week as a collapse in TerraUSD, one of the globe’s largest stablecoins, sent digital currencies already swept up in a sell-off of riskier assets into meltdown. Bitcoin hit a 16-month low of around $25,400 on Thursday.

In contrast, crypto investors are finding it difficult to profit from the global macroeconomic scenario. This year, the Federal Reserve is likely to raise interest rates rapidly in order to battle rising prices. Meanwhile, the chances of a recession in the United States are greater if it posts another three-month stretch of negative GDP growth.

Nomura team added that they expect the sector to mature over time and become more regulated which will make it more attractive for investors and so as result volatility is expected to reduce overtime.

HSBC, one of the world’s major banks, has revealed that it will be creating a bespoke managed portfolio for its Asian private banking customers in the virtual realm earlier last month. The banks have been on the cutting edge of blockchain and digital asset research and development for some time now. The race to offer cryptocurrency-based products and services to clients has intensified as the market matures.

Financial institutions turn to cryptocurrency as demand for digital assets grows

Nomura is not the only financial institution to offer cryptocurrency-based products and services. Several worldwide investment banks have been attempting to provide more crypto-related services in response to client demand for access to a market that has quickly expanded.

In April, Goldman Sachs announced that it would be offering its clients exposure to Bitcoin through various derivatives products, including futures and non-deliverable forwards. The American investment bank and Wall Street giant, Goldman Sachs, processed its first bitcoin-backed loan deal and it was reported the bank would grant a loan to the customers while accepting Bitcoin as collateral.

The move was seen as a major legitimization of the cryptocurrency market by one of the world’s largest investment banks.

It is clear that there is a growing demand from clients for access to cryptocurrency products and services. As the market matures, we can expect more financial institutions to enter the space and offer innovative products and services to meet this demand.

Mary Brenda

Mary Brenda

I'm a content marketer with interests in emerging niche including Blockchain, Cryptocurrency, Esports, Video games and other tech. I've previous worked with a variety of clients, such as ASUS ROG, BitcoinBink, ESL India, OMEN by HP, Red Bull and more.

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