Interdealer Broker TP ICAP Will Be Selling CME’s Bitcoin Futures to Investors

  • TP ICAP is going to offer services to investors that want to have access to CME Bitcoin futures
  • The firm registered a revenue in 2018 of over $2.2 billion
  • The UK-based interdealer broker TP ICAP will be acting as an intermediary for investors that want to trade Bitcoin futures. This is according to a report released by Bloomberg on June 17. The new venture is run from London by Simon Forster and Duncan Trenholme.

ICAP Allows Investors To Purchase CME Bitcoin Futures

TP ICAP will be allowing customers to purchase Chicago Mercantile Exchange’s (CME) Bitcoin futures. This month, the CME is going to be the only offerer of Bitcoin futures since the Chicago Board Options Exchange (CBOE) is shutting down its operations.

The company is also working so as to add non-deliverable forwards that are linked to Bitcoin. The intention is to also start operating desks in both Asia and the United States. As Bloomberg reports, the firm seems to be experiencing a decrease in its core business model, which pushed the firm to start offering these futures contracts.

The report reads as follows:

“Interdealer brokers have traditionally relied on handling trades for banks, but their volumes shrunk in the aftermath of the financial crisis. A profit warning last year wiped 36% from TP ICAP’s market value in a day. It’s regained about 10% since then to 1.6 billion pounds ($2 billion).”

It is worth mentioning that customers will also have to be compliant with Know Your Client (KYC) and Anti-Money Laundering (AML) regulations for them to be able to have access to these Bitcoin futures. In the future, the firm could eventually be adding support to other altcoins or tokenized real-world assets.

Duncan Trenholme, the firm’s head of digital asset market, explained that they want to be close to what is happening in this nascent asset class. They believe that it is important to invest in the early stages of a growing market. Furthermore, he said that this technology could disrupt or impact other asset classes where they are currently operating.

According to Fidelity Digital Assets, institutional investments are likely to increase over the next five years. JP Morgan Chase informed that the crypto market is different than what it was in 2017 when Initial Coin Offerings (ICOs) were at the centre of the attention. Nowadays, institutions are more interested in the space than what they were in the past and they are ready to place their funds in the market.

Other companies that are also working to offer services to institutions include the Intercontinental Exchange (ICE) and Fidelity Investments.

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