CRC Blockchain Industry Commentary #7
On December 9th, Bakkt will be launching the first regulated options contract for bitcoin ($BTC) futures. The contract is European style meaning it cannot be exercised before the maturity date and will allow trades to be closed out in cash or bitcoin.
CRC Commentary: While bitcoin futures markets have existed for almost two years through traditional financial actors such as CME but also through crypto-native exchanges like Bitmex, the introduction of options presents investors with another means to gain exposure to this asset through familiar channels, without having to worry about custody. Derivative products are important tools for interested parties to hedge any unwanted exposure to bitcoin, and a robust options market greatly expands hedging capabilities.
Cryptocurrency exchange Huobi’s Japanese unit, Huobi Japan, has raised 500 million yen (~$4.6 million) in new equity funding. Announcing the news on Friday, Huobi Japan said it has issued “new shares” to the Japanese financial services group FPG Corporation for raising 499,968,000 yen. The shares sale is via a third-party allotment and is “part of our capital policy for business expansion in Japan,” said the exchange.
CRC Commentary: Huobi Japan was set up last year after Huobi Group acquired a majority stake in local licensed cryptocurrency exchange BitTrade. Japan requires all cryptocurrency exchanges to get registered with the FSA to operate in the country. As I have mentioned yesterday, Huobi is following M&A or JV strategy for its international expansion whuch is quite different than Binance’s strategy of using third parties. However, Japan is one of the rare countries where crypto regulation is already determined and there is no way of going around the regulation other than applying for one. There are already more than 7 exchanges in Japan that have operating licenses. It will be interesting to see how Huobi will be competing with others.
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