Elwood Technologies Touts Strong Focus on Crypto Derivatives

Cryptocurrency trading steadfast Elwood Technologies says its focus, pursuing this week’s hefty $70 cardinal backing round that included 3 tier-one banks, volition beryllium connected institutional-grade crypto derivatives.

Big banks similar the ones who participated successful Elwood’s Series A rise – Goldman Sachs, Barclays and Commerzbank’s CommerzVentures – request to clasp cryptocurrencies astatine arms magnitude for now, which means not holding the underlying plus itself but gaining vulnerability via futures and options contracts.

“There’s a immense absorption connected derivatives,” said Elwood CEO James Stickland successful an interview. “It’s a large mode for tier 1 banks to get progressive successful a synthetic quality without having to clasp the underlying. Actually determination are immense margins and spreads to beryllium made successful the derivatives space, and the traders that are coming from those organization houses are precise utilized to that plus class, truthful they tin deploy akin strategies.”

Out of the banks backing Elwood, Goldman is the astir advanced, having been among the fist connected Wall Street to commencement trading bitcoin futures. Commerzbank became the archetypal large German slope to determination towards hands connected crypto adoption, announcing that it had applied earlier this twelvemonth for a licence to custody crypto assets from BaFin, Germany's Federal Financial Supervisory Authority.

“In the tract of integer assets, Commerzbank wants to assistance signifier emerging integer ecosystems, particularly with respect to custody and trading successful non-physical assets,” a spokesperson for the slope told CoinDesk via email. “We are pursuing our ain integer plus strategy and are besides readying our ain offerings for our customers successful the coming years. The aboriginal connection is initially aimed astatine organization customers.”

Barclays said it could not remark connected integer assets specifically, but a spokesperson told CoinDesk via email that the slope was blessed to articulation the circular and supports the build-out of regulatory compliant infrastructure for this caller plus class.

Elwood’s Stickland said helium is simply a “huge instrumentality of Barclays,” and not conscionable due to the fact that of the U.K. connection.

“The markets squad has been precise thoughtful astir getting progressive successful integer assets,” Stickland said. “Getting progressive successful the infrastructure is the champion mode to provender the foundations of this plus class. As we germinate the exertion and the full plus radical successful general, it’s going to beryllium indispensable that we person players similar Barclays involved.”

Elwood’s absorption connected organization and synthetic crypto products possibly stands successful opposition to galore different crypto trading firms, particularly successful places similar Switzerland, wherever the existent trajectory is towards non-fungible tokens (NFTs) and decentralized concern (DeFi).

“We volition bash a small spot successful that abstraction to let radical a cardinal portfolio to negociate each their integer assets,” helium said. “We volition besides enactment the tokenization of existent property and the tokenization of different plus classes.”

Given the existent clime crossed crypto markets, a formation to the information of things similar derivatives volition pull organization players, Stickland said.

“I deliberation there’s gonna beryllium a immense magnitude of derivatives action, wherever there’s surely makers and takers still, which evidently thrust a immense magnitude of flow,” helium said. “When the derivatives travel starts bubbling, it volition thrust buying and selling of the underlying assets.”

Looking ahead, murmurs of a crypto wintertime are astir apt premature, Stickland added:

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