 crypto options trading and structured notes. Customers can safeguard themselves against market swings thanks to DBS's recent introduction of Bitcoin options trading.){kind=link}
Singapore’s DBS Bank is set to expand its digital asset offerings by launching over-the-counter (OTC) crypto options trading and structured notes for institutional clients.
The bank announced on September 17 that, starting in the fourth quarter of 2024, clients will be able to invest in Bitcoin and Ether through these advanced financial products.
Crypto Options Trading and Structured Notes from DBS Bank
With DBS now offering cryptocurrency options trading, customers can protect themselves from market fluctuations. The values of the underlying cryptocurrencies are the source of value for crypto options contracts.
These contracts offer traders a tactical method of controlling price swings by allowing them to buy or sell cryptocurrency assets at a fixed price at a later time.
In particular, DBS emphasised that clients who custody their Bitcoin and Ether with the bank will have the possibility to hedge their positions using various options structures.
Clients looking to safeguard their assets from price drops can utilize put options. A put option gives the client the right to sell Bitcoin at a fixed price on a future date, even if the market price falls below the agreed price at that time.
DBS will also provide structured notes, which are debt securities whose performance is dependent on the performance of underlying assets such as cryptocurrency. Through structured notes, investors can be exposed to digital assets and possibly profit from changes in the price of Ether and Bitcoin.
Professional Investors Seek Crypto Exposure
Jacky Tai, DBS Group’s Head of Trading and Structuring, emphasized that institutional investors are increasingly incorporating digital assets into their portfolios.
Tai stated, “Our clients now have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios.”
This initiative is part of the bank’s broader goal to offer innovative digital asset services tailored to the needs of professional investors.
DBS has aggressively embraced Web3 and blockchain technology. The bank introduced DBS Treasury Tokens on a permissioned blockchain that was compatible with the Ethereum Virtual Machine (EVM) in August 2023 as part of a pilot study.
The goal of this project is to simplify corporate liquidity management in many different marketplaces. Subsequently, DBS showcased its dedication to blockchain solutions by incorporating blockchain technology into an additional pilot program aimed at improving the governance and efficiency of government award distribution.
DBS Bank & Its Crypto Exposer
Singapore is the world leader in the adoption of cryptocurrencies because of its financial infrastructure and favourable regulatory framework. In a recent report, the investment migration consulting firm Henley & Partners surpassed the U.S., Hong Kong, and the UAE to name Singapore as the best jurisdiction for the adoption of cryptocurrencies.
DBS has been at the forefront of Singapore’s digital asset revolution. When it debuted in 2020, its DBS Digital Exchange was among the first banks in the world to provide cryptocurrency services.
DBS reports that in the first five months of 2024, trading volumes on the platform tripled and the number of active clients increased by 36%. Furthermore, assets under custody rose by 80%, indicating institutional clients’ increasing need for digital asset services.
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