Citigroup Sets to Begin Trading Bitcoin Futures for Institutional Clients

Citigroup, the third-largest banking giant in the US, is planning to offer Bitcoin futures trading for some institutional clients. A source within the bank revealed the matter but requested to remain anonymous.

The person familiar with the situation disclosed that Citi is awaiting regulatory approvals to start trading Bitcoin futures on CME (the Chicago Mercantile Exchange).

The source said that Citi moved to fill the surging client demand for cryptocurrency exposures as Bitcoin climbs towards $50,000 per coin. The Citi spokeswoman said:

“We are presently considering products such as futures for some of our institutional clients, as these operate under strong regulatory frameworks,” 

“Given the many questions around regulatory frameworks, supervisory expectations, and other factors, we are very thoughtful about our approach,” she further added.

The spokeswoman mentioned that Citi’s trading operation could start with Bitcoin futures before moving to other products such as Bitcoin exchange-traded notes. 

“The bank is likely to win approval to begin trading CME bitcoin futures first and then Bitcoin exchange-traded notes (ETNs),” she said.

Banks Embracing Bitcoin Craze

Citigroup, which is still waiting for the necessary regulatory approvals, would join a fellow major bank Goldman Sach in providing Bitcoin futures trading.

One of the world’s largest currency trading banks, Citi, first showed interest in Bitcoin in May 2021 when the bank announced that it was considering launching cryptocurrency trading, custody and financing services for its client base. The bank’s interest in digital currency services was triggered by the ‘very rapid’ accumulation of interests in Bitcoin within a wide variety of its large clients.

In late June, Citi launched a “digital asset group” to provide its clients access to cryptocurrencies, which operate within the bank’s wealth management division.

More banking institutions are embracing Bitcoin. In June, Goldman Sachs started trading Bitcoin futures with Galaxy Digital, the crypto merchant bank run by former hedge fund manager Mike Novogratz.

The move by Goldman, the major global bank, made a positive impact on Wall Street and beyond as banks increasingly face pressure from clients who want exposure to Bitcoin. By being the first major US bank to start trading cryptocurrency, Goldman gave other banks the cover to start doing so as well.  

Last month, Bank of America, the second-largest bank in the US, approved Bitcoin futures trading for some clients.   

Although banks have been conservative in their approach to the cryptocurrency sector, that has changed, and now they are allowing some of their clients to access the crypto market.

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Grayscale Pairs with Coindesk Index to Launch DeFi Fund and Index

Grayscale Investments LLC announced Monday to launch its 15th investment product, a DeFi fund and index, which focuses on decentralised finance (DeFi) tokens.

Michael Sonnenshein, the CEO of Grayscale crypto asset management firm, talked about the development and said that the company had begun a fund that targets DeFi tokens like Aave and Uniswap for its institutional investors.  

The new index is designed to help investors tracking DeFi tokens and investing in them. As of July 1, a DeFi -particular index, created by CoinDesk’s TradeBlock, started tracking the new fund whose 10 DeFi blue chips include Bancor (BNT), UMA Protocol (UMA), Yearn Finance (YFI), Synthetix (SNX), SushiSwap (SUSHI), MakerDAO (MKR), Curve (CRV), Compound (COMP), Aave (AAVE), and Uniswap (UNI).

Sonnenshein said that the firm had seen interest in a wide base of its existing investors and the increasing interest in popular cryptocurrencies in the decentralised finance ecosystem. The CEO, therefore, mentioned that the rising user adoption in DeFi protocols triggered Grayscale to launch an institutional-grade index and a DeFi fund:

“The emergence of decentralised finance protocols provides clear examples of technologies that can redefine the future of the financial services industry. We’re proud to offer investors exposure to DeFi through Grayscale’s trusted, secure, and industry-leading investment product structures,” 

Grayscale’s plans for Bitcoin ETF  

As mentioned above, the new DeFi fund is Grayscale’s 15th investment product, which is the second diversified fund launched after another diversified fund called the Digital Large Cap Fund.

Last week, Grayscale approved its Digital Large Cap Fund to become an SEC-reporting company. Already two of the firm’s other cryptocurrency investing products, namely the Grayscale Bitcoin Trust and the Grayscale Ethereum Trust, are SEC reporting companies.

The development about becoming an SEC reporting outfit is vital as Grayscale said that the aim is to provide the investors with a higher level of disclosure and reporting besides the already stringent obligations to which its products adhere.  

Grayscale also recently said that its crypto products are designed with the focus of eventually becoming Exchange Traded Funds (ETFs). The firm stated that becoming an SEC reporting is the final step for their products before transforming into an ETF.


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