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Bitcoin Derivative in Development by Wall Street Engineers

A Bitcoin derivative is under development by wall street engineers. Specifically, SFOX sees NDFs as a vehicle towards the expansion of crypto-related trading, through which the daily trading volume could potentially reach $100 million a day, according to SFOX.

The Development Process

A group of engineers and traders of crypto prime brokerage ‘SFOX‘ are working on a way to expand and increase access to Bitcoin for banks and big investors via a bespoke derivative.

SFOX’s Co-Founder George Melika mentioned that his firm is in talks with large banks, as well as market makers such as Jane Street, towards opening a market that facilitates the trade of Bitcoin derivatives.

The main goal here is to utilize NDFs, which are non-deliverable forward contracts typically used in currency markets, to provide banks with the wherewithal to expose clients to Bitcoin on a larger scale at a contract agreed-upon price, all of which will be settled in cash.

On the Flipside

  • Banks have been wary of buying or trading Bitcoin due to concerns surrounding compliance, Know-Your-Customer (KYC) rules, and market liquidity.

Why You Should Care

SFOX effectively has more than 120 institutional clients, allowing it to expand liquidity to a market for NDFs. This could contribute to generating additional interest in Bitcoin investments and bring the token’s value forward after its recent bearish turn.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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    Author

    Milko Trajcevski has been in the crypto world for years, and as such has gathered both a skill for writing as well as a native prowess when it comes to understanding everything that occurs within that world. Through skilled writing and determination, he covers articles about cryptocurrency, tokens, blockchain, crypto-asset regulations, crypto wallets, exchanges, liquidity, DApps, forks, mining, security, and blockchain technologies. He is a professional with a track record of proven expertise within the crypto space.