OrBit Markets, an institutional liquidity provider for crypto options, has announced the launch of a groundbreaking derivative product that combines Bitcoin and gold. This new hybrid asset, developed in partnership with execution broker PI Digital, aims to provide investors with exposure to both digital currencies and traditional safe-haven assets like gold.
The derivative product, known as XAUT, is a token backed by physical gold and issued by Tether. At maturity, the product can be settled in USDT, XAUT, or Bitcoin, as designated by OrBit Markets. This flexibility allows investors to express diverse views on the performance of Bitcoin and gold, such as anticipating gains or losses in both assets or scenarios where one asset's returns rise while the other's decline.
OrBit Markets has observed a surge in interest from investors expecting a sustained rally in these "safe haven" assets, driven by concerns over the U.S. Federal Reserve's hawkish monetary policy and the resulting turmoil in the banking sector. The company believes this hybrid asset will appeal to investors familiar with traditional assets like gold who are now venturing into the crypto space.
The "worst-of-put option" feature of the derivative allows investors to earn an enhanced yield if both Bitcoin and gold appreciate. However, if either asset declines, investors may be "put" into the underperforming asset. This unique structure provides investors with a dual opportunity to potentially benefit from the upside of both Bitcoin and gold while managing downside risk.
In March, OrBit Markets' innovative hedging solutions were utilized by the DeFi-focused asset management firm MEV Capital to protect liquidity providers' positions and mitigate risks in Uniswap v3 pools. This demonstrates the company's commitment to offering flexible and adaptable solutions to its partners.
Pulkit Goyal, VP of Trading at OrBit Markets, emphasized the firm's plans to introduce more hybrid products tailored specifically for institutional investors. This move aligns with the broader trend of traditional financial institutions offering hybrid products that combine stocks with commodity assets.
The launch of the Bitcoin and gold hybrid derivative highlights the growing maturity and sophistication of the crypto options market. As institutional investors increasingly seek exposure to digital assets, innovative products like this can help bridge the gap between traditional finance and the crypto space.
In conclusion, OrBit Markets' Bitcoin and gold hybrid derivatives represent a significant development in the crypto options landscape. By combining the allure of Bitcoin with the tangible safety of gold, the product aims to attract a broader investor base and provide a unique opportunity for exposure to these "safe haven" assets. As the crypto market continues to evolve, we can expect to see more innovative products and solutions emerge from leading liquidity providers like OrBit Markets.
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