B2C2, a cryptocurrency liquidity supplier and an over-the-counter (OTC) buying and selling agency based mostly in London, has launched a brand new gold spinoff product, which is priced and settled in bitcoin (BTC).
Claiming to launch the cryptocurrency market’s “first” such product, B2C2 mentioned the gold-bitcoin spinoff will permit institutional shoppers to commerce gold synthetically by way of its OTC buying and selling unit, B2C2 OTC Ltd, which is licensed and controlled by the U.Ok.’s Monetary Conduct Authority (FCA).
“Purchasers commerce an oz. of gold (minimal commerce dimension) priced in bitcoin, and the spinoff is settled in bitcoin,” Max Boonen, founder and CEO of B2C2, instructed The Block. The present worth of gold per ounce is round $1,500.
Artificial buying and selling permits merchants to take a brief or lengthy place with out truly shopping for or promoting an underlying asset. “The advantage of buying and selling gold (or bitcoin) in a spinoff type (synthetically) is that it’s less complicated to commerce than the money underlier for quite a lot of operational causes, and usually represents the vast majority of exercise within the product/asset,” mentioned Boonen.
The gold-bitcoin spinoff is a results of demand from its shoppers, mentioned B2C2. “The shoppers we’re seeing demand from are those that have their very own consumer base of merchants and macro hedge funds,” Boonen instructed The Block, including that the product is on the market to “eligible counterparties” and “skilled shoppers” as outlined by the FCA.
Gold has soared in 2019, as buyers concern recession and are anxious in regards to the affect of the U.S.-China commerce struggle, amongst different macroeconomic elements corresponding to central financial institution charge cuts.
“The present macro surroundings, dominated by uncertainty over financial development and inflation, is prompting central banks to rethink financial coverage and market members to reassess the probably path of rates of interest. Conflicting narratives abound, fuelling market exercise, and we count on demand to solely develop for methods to realize and handle publicity to deflationary property corresponding to gold and bitcoin,” mentioned Boonen.
Notably, not solely bitcoin however the spinoff product additionally permits shoppers to settle trades in different tokens, together with recently-launched PAX Gold (PAXG), a gold-pegged token by stablecoin issuer Paxos. “We’re agnostic as to which of the key tokens our shoppers select to make use of to settle their trades with us, be it Paxos Gold or one other. These tokens will give them entry to the underlying metallic since they correspond to possession of bodily gold in vaults,” Boonen instructed The Block.
Wanting forward, B2C2 is planning to launch extra merchandise, however solely the place it has a “clear edge,” to do, Boonen instructed The Block, including: “We’re an digital market-making agency before everything. We count on to proceed increasing our providing past cryptocurrencies.” B2C2 presently additionally presents buying and selling in six “large-cap” cryptocurrencies – bitcoin (BTC), ether (ETH), XRP, litecoin (LTC), EOS and bitcoin money (BCH).