• Nomura begins trading cryptocurrency derivatives, joining rivals Goldman Sachs and JPMorgan

  • Nomura, a Japanese investment bank, began trading bitcoin derivative contracts this week, following competitors such as Goldman Sachs (GS) and JPMorgan (JPM) in providing clients with access to the cryptocurrency market.

    According to an emailed statement from the bank, Nomura has launched over-the-counter cryptocurrency derivatives using bitcoin (BTC) non-deliverable forwards and non-deliverable options for clients in Asia based in Singapore.

    “We also have the capability of offering bitcoin futures and options trading, with such trades performed this week on the CME with Cumberland DRW, marking Nomura’s first digital asset trades,” Rig Karkhanis, the bank’s head of global markets for Asia ex-Japan, said in a statement.

    The launch coincides with a period of heightened volatility in the cryptocurrency market, precipitated by the sudden collapse of Terra’s LUNA stablecoin and decentralized finance platform. This week, the whole crypto market cap has plunged by nearly 30%.

    “Options enable investors to trade volatility directly and protect against downside risks,” Karkhanis said.

    In the last year, banks have bowed to client demand and begun to trade cryptocurrency, albeit at a distance and without touching spot markets. Goldman Sachs, the first Wall Street bank to start trading cryptocurrency futures, has also revealed that it will use bitcoin as collateral for dollar loans.

    “Digital assets have grown from a niche industry into a $1.5 trillion asset class, but many investors still don’t have an avenue to get exposure to the space,” Paul Kremsky, the head of relationship management at Cumberland DRW, said in an email.

    Nomura was one of the first banks to investigate crypto asset custody, joining the Komainu custody joint venture in June 2020 alongside fund manager CoinShares and custody specialist Ledger.

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