The increased interest of institutional investors is spurring new crypto projects.
Some of the biggest players in the crypto industry are supporting a new trading platform for crypto derivatives, which may suggest that the current upward trend is being driven primarily by increased interest from institutional investors.
The said crypto trading platform called Globe has already raised 3 million US dollars in start-up capital for the development of the Globe Derivative Exchange in an initial financing round
The declared aim of the platform for derivatives trading is to give institutional investors access to the crypto market. The project’s early investors include big names such as billionaire and crypto investor Tim Draper , Bitcoin Profit investment firm Pantera Capital and venture capitalist Y Combinator.
Pantera Manager Paul Veradittakit confirms that the increased interest of institutional investors in cryptocurrencies is the main reason for his company’s investment in Globe.
Veradittakit told Cointelegraph:
“There is a wave of interest in cryptocurrencies coming from big banks, fintech companies and investment firms. Globe has developed a platform and products that are tailored to this highly professional clientele. […] We are pleased that we can support the Globe team in building a future-oriented platform for the crypto financial system. “
Globe has developed a proprietary matching and risk assessment engine called Thor. As the company claims, Thor was designed by developers from several major financial institutions, including JPMorgan Chase, Bank of America Securities, Citibank, UBS, and Getco.
Trading in crypto derivatives has grown significantly this year, as evidenced by the increased trading volume for crypto futures on platforms such as BitMEX, HuobiDM, OKEx and Binance. The increasing trade in derivatives is clear evidence of the evolution of the crypto industry over the past three years.
According to a new study by the Kraken crypto exchange, the market for crypto derivatives is „now at least 4.6 times as large as the spot market“. Whereby the spot market is understood to mean the market on which cryptocurrencies are traded directly and not the financial products based on them.
Kraken sees the availability of leverage as one of the driving factors behind the attractiveness of derivatives trading. Globe states on its own website that it offers up to 100 times the leverage.
As a reminder: Leverage describes a literal leverage effect in trading, which makes it possible to achieve higher profits through the use of outside capital. However, there is also an increased risk associated with it.