Investment Platform Caspian Announces Plans for Crypto Derivatives

Caspian cryptocurrency derivatives bitcoin ethereum Galaxy Capital Deribit

Portfolio management platform Caspian has announced plans to introduce crypto derivatives trading, in a move that will give investors access to a range of new products based on crypto assets.

The institutional trading firm, which is backed by industry giant Mike Novogratz’s Galaxy Capital, said it had developed an integration with the Deribit exchange to offer futures and options based on cryptocurrencies like bitcoin and ethereum.

Caspian connects via the platform API, delivering fast trading for high volumes with “ultra-low latency.”

According to Caspian, the products will allow up to 100 times leverage on trades, creating more profit potential compared to investing in underlying markets. While the risks of trading derivatives are correspondingly high, Caspian said the move would give investors access to the same tools available in other trading markets.

Robert Dykes, CEO at Caspian, said the launch was good news for investors looking to speculate on crypto markets.

“Our goal at Caspian is to provide crypto traders and investors the same standard of tools and service that exist in the traditional markets.”

Derivatives are trading instruments tied specifically to the performance of underlying asset markets — in this case, the price performance of cryptocurrencies like bitcoin and ethereum.

Rather than traders investing in the asset, they buy a separate contract of rights to the asset, such as an option to buy or sell at a future price, offering indirect exposure to fluctuations in the asset value.

Crucially, derivatives are traded as instruments in their own right, and do not require parties to take ownership of the underlying asset. This is expected to be attractive to institutional investors and regulated traders, who may otherwise be unwilling or unable to take ownership of cryptocurrency, but would still like the opportunity to speculate on these markets.

Caspian is the result of a joint venture between cryptocurrency investment company Kenetic Capital and trading systems company Tora.

The firm attracted the high-profile backing of Galaxy Capital as part of a funding round late last year, raising some $16 million from a consortium of investors.

The launch of futures and options follows on from the high-profile launch of futures products at CBOE and CME Group in December 2017, which many investors have attributed to increasing transparency in crypto markets.