Crypto-linked ETPs or exchange-traded products will now be offered by TP ICAP, the largest worldwide interdealer broker. It is another indicator of how digital assets are gaining mainstream approval. The brokerage firm facilitates transactions of financial products between large financial institutions like investment banks and hedge funds. It has clients like Goldman Sachs, Jane Street, and Flow Traders.
Large Institutional Investors Want to Trade in Digital Assets
TP ICAP wants to handle these demands better with its new offer. Being able to trade in equity-linked products is the best way for investors to become familiar with digital assets. The company has been trading ETPs like BTCE, the physical bitcoin of the ETC group. Now it wants to handle the demands for new digital assets from large institutional investors. It is not the first company to do so. Some of the well-known companies operating in the brokerage field like Goldman Sachs, Bank of America, and UBS have been settling and clearing cryptocurrency ETP products for hedge funds in Europe.
It allows companies to invest in the crypto world without getting involved directly. A security channel is used to route the investments. This makes it easy to track the performances of different digital assets. Some of the ETP products presently offer modest liquidity. That is expected to change as institutional investors start investing in this space. It will lead to more digital financial products, expanding the overall crypto market.
TP ICAP is planning to launch trades in crypto ETPs in the next few months in the US. Its main focus in 2022 will remain on over-the-counter derivative products linked to digital assets. These derivatives are financial contracts, like a swap, arranged out of the exchange.