SBI Planning To Launch Cryptocurrency Derivates Market

SBI Holdings, a parent company of SBI Crypto Investment, has been working to enter the cryptocurrency market. Its most recent move is its plan to launch a cryptocurrency derivatives trading market and if the platform’s efforts are successful, virtual currency enthusiasts may find the improved liquidity and diverse trading that they are striving for.

The platform purchased a 12 percent stake in electronic trading company Clear Markets and although specifics of the purchase have not been identified, it is reported that the deal is worth $9 million. The investment is part of SBI Crypto’s plan in developing a derivatives trading platform to attract institutional investors into the market.

Although virtual currencies are known for their success as an asset class, one of the main impediments concerning this group is that it tends to be its volatility. The volatility may be the main deterrent to widespread adoption. Bitcoin serves as a stellar example of volatility – the cryptocurrency declined 30 percent in June and regained it back in July.

The establishment of a cryptocurrency-based derivatives market may be able to resolve the volatility seen with traditional cryptocurrencies. However, there is an impediment here as well, which is trading is underdevelopment, which means that there are not many ways for big-money investors to hedge against the risk. The good news is that SBI’s relationship with Clear Markets may be able to be a step in the right direction for the ultimate establishment of family office, hedge funds, and other major investors.

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