In yet another example of institutional crypto appetite, the London firm will execute bitcoin futures trades on behalf of its clients.
In an interview with Bloomberg, Simon Forster, who will help run the new initiative out of London, said:
“We want to be close to what’s happening within this nascent asset class because we believe it’s important to invest in the early stages of a growing market.”
It follows news from Fidelity, JP Morgan, Nasdaq, and the Intercontinental Exchange, all of which have embraced bitcoin or BTC futures trading.
Bitcoin trading: injecting new life into traditional brokers
TP ICAP hopes its bitcoin trading initiative will lure new client money and diversify its offering.
The firm, which acts as an intermediary to financial, commodity and energy markets, has seen revenues slump since the 2008 meltdown.
Brokerages like ICAP typically make trades for its banking partners. But volumes have waned and the company was forced to issue a profit warning last year.
Cryptocurrency poised to disrupt finance
ICAP will execute cash-settled bitcoin futures trades on behalf of its clients via CME.
The initiative will be run from London by Simon Forster and Duncan Trenholme with plans to expand to Asia and the US. ICAP will launch the service with derivatives trading, but doesn’t dismiss the option of holding digital assets directly in the future.
Forster admits that bitcoin poses a threat to many traditional assets and financiers can’t afford to stand on the sidelines.
“TP ICAP also understands that this technology could disrupt or impact other asset classes where we currently operate, so we feel it’s important to be informed.”
Institutional bitcoin trading deepens
After years of reluctance, traditional finance firms are slowly dipping their toes in the crypto waters.
Earlier this year, Fidelity launched a bitcoin custody service for its clients. The $7 trillion asset management company will also facilitate bitcoin trading in the coming months.
Intercontinental Exchange (ICE), parent company of the New York Stock Exchange, is gearing up to launch Bakkt – a physically-settled bitcoin futures and custody offering. Meanwhile, Nasdaq will launch its own bitcoin derivatives platform in 2019.
Barry Silbert, CEO of Digital Currency Group, said recently that institutional demand has shot up.
“If you compare the infrastructure today relative to where it was right before the last bitcoin bull market in 2017, it’s really night and day. And so now the question is not if institutional money is going to move into the asset class, but the question is really when.”
Last modified: March 4, 2021 2:36 PM