Japanese investment bank Nomura began trading cryptocurrency derivatives this week, joining rivals such as Goldman Sachs and JPMorgan in offering clients access to the crypto market.
Nomura launched over-the-counter cryptocurrency derivatives trading with non-deliverable bitcoin futures and non-deliverable options for clients in Asia from Singapore, the bank said in an email.
"We are also able to trade bitcoin futures and options, with such trades executed on the CME this week with Cumberland DRW, representing the first digital asset trades for Nomura," Rig Karkhanis, the bank's head of global markets for Asia ex-Japan, said in the statement.
The launch coincides with a highly volatile period in the crypto market, triggered by the dramatic collapse of Terra's stablecoin and decentralized financial platform LUNA. The total crypto market capitalization fell by about 30% this week.
"Options allow investors to trade volatility directly and protect against downside risk," Karkhanis said.
Over the past year, banks have yielded to client demand and begun trading cryptocurrencies, albeit at arm's length without touching spot markets. Goldman, the first Wall Street bank to start trading crypto futures, has also announced it will use bitcoin as collateral for dollar loans.
"Digital assets have gone from a niche industry to a $1.5 trillion asset class, but many investors still don't have exposure to this space," Paul Kremsky, head of relationship management at Cumberland DRW, said in an email.
Nomura was one of the first banks to get involved in crypto asset custody, joining the Komainu custody joint venture in June 2020 along with fund manager CoinShares and custody specialist Ledger.
Nomura Research Institute, an economic advisory arm of the bank, has launched a crypto-asset index that tracks the Japanese cryptocurrency market in 2020.