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Nomura unveils over-the-counter Bitcoin futures and options

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Nomura, a leading financial service provider in Japan, has unveiled Bitcoin derivatives for institutional clients. The launch of this product comes as the crypto market records a massive pullback, with Bitcoin’s market cap falling to around $560 billion.

Nomura unveils OTC Bitcoin derivatives for institutional clients

The first Bitcoin derivatives trade on behalf of Nomura was done by Cumberland DRW. Nomura’s OTC Bitcoin futures and options will only be available to institutional clients, and they can only be settled in cash.

Nomura’s head of markets, Asia ex-Japan (AEJ), Rig Karkhanis, noted that this product will allow the firm to work closely with its institutional clients to increase demand for different products and services.

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This is not the first time Nomura is venturing into the digital asset sector. In May 2018, Nomura became the first digital custody bank after launching a new venture named Komainu. The bank also announced a partnership with Ledger, a digital asset hardware wallet, and Global Advisors, an investment manager focusing on Bitcoin.

One of the top concerns aired by institutions venturing into the digital asset sector is storage and security. By making it easier for investment bankers and other institutions to handle large-scale investments in cryptocurrencies, the move is expected to boost the interest of institutional players in Bitcoin.

In July 2020, Nomura unveiled a custodial service targeting institutional players. At the time, Komainu partnered with Ledger and CoinShares for the service. According to the company, Komainu is the first digital asset custody service provider created by institutions targeting other institutions.

Growing demand for crypto despite bearish sentiment

Cryptocurrency markets have been in a bearish state over the past few months. Nevertheless, there has been an increased demand for crypto services from institutional and private investors. This trend has forced financial institutions to change their models to accommodate this growing demand.

Recently, the cryptocurrency market witnessed a major pullback that resulted in over $300 billion being liquidated from the market within four days. Besides causing investor losses, the dip could also trigger more calls for regulations in the sector.

The head of forex structuring, AEJ, Nomura, Tim Albers, said, “We expect the sector to mature over time, become more regulated, which makes it more attractive for an institutional investor.” He added that once volatility cools off, institutional clients would flock to the market again.

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