Genesis Global Capital, a cryptocurrency trading firm, has announced the execution of a one-of-a-kind trade that will pave the way for the introduction of new institutional cryptocurrency futures products.
Genesis has completed the first-ever over-the-counter (OTC) block trade of a Basis Trade at Index Close (BTIC) transaction involving Bitcoin futures contracts issued by the Chicago Mercantile Exchange utilizing Bitcoin futures contracts (CME).
According to a press release issued on September 26, the transaction was completed in partnership with derivatives market maker Akuna Capital.
BTICs, which are more often utilized in the stock market, have never been used in the cryptocurrency market before. When using this kind of trading, investors can buy and sell futures contracts at prices that are dependent on the index’s closing price at the end of the day.
TIM McCOURT, the Global Head of Equity Index and Alternative Investment Products at CME Group, said the product was the next step in providing broader exposure to CME’s Bitcoin derivatives and Ethereum futures, with the Ethereum futures contracts having been released in February this year.
He went into greater detail about the merits of this new trading instrument, stating:
“BTIC enables market participants to more efficiently trade the basis while providing a regulated marketplace for real-time price discovery and enhanced trading precision for institutional participants who want to optimize holdings between the futures and spot markets.”
Genesis provides liquidity to the CME Group for its bitcoin and ether futures and options products, among other things.
Micro Bitcoin futures, which are contracts for 0.1 bitcoin, were introduced by the CME in May. The product was created to assist institutional traders to diversify their portfolios by hedging their exposure to cryptocurrency assets.
With over a million contracts traded by the end of June, the product indicates that institutional investors who are still experimenting with cryptocurrency have a significant appetite for smaller stakes in the asset class.
This latest product is yet another illustration of how well-heeled investors can obtain exposure to the cryptocurrency markets by broadening their options.