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.

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

Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia