A major international brokerage firm TP ICAP has just announced that they are expanding their services and will offer Bitcoin futures trading. TP ICAP is a global firm of professional intermediaries that operates in the world’s financial, energy and commodities markets. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
These actions are not as sudden as they might seem. About a year ago, TP ICAP formed a working group with the primary goal of examining how to approach cryptocurrencies. Now a year later, we see their plan on how to approach them. They are becoming one of the few firms in the business to offer Bitcoin futures trading. However, Duncan Trenholme, the project manager, feels that many companies will enter the Bitcoin futures market over the next year or two:
“[Many institutions] are exploring how tokens can legitimately be traded or stored and I’d expect more projects to hit the market over the next year or two.”
At the moment, TP ICAP is working with cash-settled futures contract that trades on a regulated market controlled by the CME Group.
Struggle in the Brokerage Business
Apparently, the company has been struggling with their primary business. Last year, TP ICAP lost around 36% of its market value in a single day due to the financial crisis. Now they have gained back only 10% of it ever since the crisis. The revenue of the company was $2.2 billion in 2018, 3% more than in 2017.
Now it looks like the company wants to test new grounds by entering the crypto market. This puts them in a sweet spot as the company becomes one of the few big players to offer crypto derivatives. Recently we saw Fidelity Investments entering the crypto-space. Also, Bakkt is probably the most anticipated platforms which has been delayed multiple times and now is expected to be available on July 22.
The new project will be based in London and run by Simon Foster and Duncan Trenholme.
TP ICAP plan is to add non-deliverable forwards (NDF) tied to Bitcoin. Also, they want to expand to Asia and the U.S.
Moreover, they are interested in other cryptocurrencies and tokenized assets as well. The company is thinking about trading in the cryptocurrency market itself.
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