The crypto winter sees miners and investors turning to derivatives

13 Feb, 2019 | Updated: 13 Feb, 2019
by Richard Allen
The crypto winter sees miners and investors turning to derivatives

With the crypto market still taking a beating, Bloomberg is reporting that diehard crypto fans have begun selling derivatives linked to digital assets in the hope of squeezing out some cash from their investments.

According to Bloomberg, the need is so acute that companies run mainly by software developers and tech experts are now negotiating terms with financial professionals on Wall Street.

“Anyone sitting on a stockpile of tokens saw in the bear market of 2018 that their business is at the mercy of crypto prices,” said Sam Bankman-Fried, CEO of Alameda Research, a quantitative trading firm for digital assets in San Francisco. “It can be crucial for those players’ survival to have some cash if digital asset prices go down.”

But it isn’t just investors taking strain. Miners are also having to come up with some creative means of keeping the lights on. Apparently, miners are now one of the main sellers of derivatives similar to covered call options, a popular trade among stock investors.

Read more: Bitmain to close down another overseas office, as an effort to survive

The crypto winter has also propelled options trading. Ex-Wall Street professionals who quit traditional trading in favor of cryptocurrencies haven’t been able to avoid the decline of the market either. QCP Capital and Akuna Capital, firms staffed by former employees of hedge funds and high-frequency trading shops are becoming big players in options trading.

Read more: Mati Greenspan lays out bullish sentiments for crypto

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