• The country’s largest stock exchange operator is developing a cryptocurrency product for institutional investors

  • The country’s largest stock exchange operator, Canada’s TMX Group, is reportedly planning to launch its first cryptocurrency futures product.

    This is in response to institutional investors’ desire to mitigate trading risks in the asset class’s infancy.

    According to Reuters, the group, which already has 17 cryptocurrency exchange-traded funds (ETFs) listed on the Toronto Stock Exchange as of December 31, plans to launch the product on the Montreal Exchange this year.

    “More institutional investors and dealers are… holding more crypto assets in their portfolios, for their clients, or in ETFs,” said John McKenzie, CEO of the company. “There’s a lot of price volatility in crypto, so (they’re looking at) how they manage that exposure.”

    McKenzie stated that TMX would not model the futures product after any other offering, but that existing regulations governing futures products should cover it. He also stated that the company has no plans to make it available to retail investors at this time.

    TMX Group reported fourth-quarter adjusted earnings per share of C$1.77, up from C$1.43 a year ago, and increased its quarterly dividend by 8% to 83 Canadian cents.

    TMX is responding to an increase in investor and corporate interest in cryptocurrencies. According to Finbold, the giant Canadian accounting firm KPMG added Bitcoin and Ethereum to its corporate treasury on Monday (February 7).

    “Cryptoassets are a developing asset class…> “We believe that institutional adoption of crypto assets and blockchain technology will continue to grow and become a regular part of the asset mix,” said Canada KPMG Managing Partner Benjie Thomas.

    Bitcoin and Ether are on the mend, with prices reaching all-time highs in 2022.

    Bitcoin (BTC) hit a four-week high on Monday (February 7), rising for the second consecutive session, aided in part by the liquidation of some short positions that had accumulated during the currency’s recent three-month downtrend.

    Glassnode, a blockchain data provider, revealed that Bitcoin shorts were under pressure last week, “with a minor skew towards short side liquidations.” However, it added that the magnitude of the liquidation remains “fairly lackluster,” insisting that a short-squeeze is just one of many factors driving Bitcoin’s rally.

    The world’s most valuable cryptocurrency reached $44,524, its highest level since mid-January. Bitcoin has gained approximately 35% since reaching a roughly six-month low on January 24.

    “The current rise came after considerable range-bound price action that saw volumes drying and shorts increasing,” said Joe DiPasquale, chief executive officer at BitBull Capital, which manages crypto hedge funds. “Typically, when the market is heavily leaning on one side of a trade, too long or too short, the price can move to counter that weight and squeeze positions,” he added.

    Ether, the second-largest cryptocurrency, hit a three-week high of $3,180 before closing up 3.1 percent at $3,153.21. It fell to a six-month low in late January, but Ether, the transactional token that facilitates operations on the Ethereum network, has risen by nearly 47 percent since then.

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