Crypto NDF World Heats Up with MDP Trades
Posted by Colin Lambert. Last updated: February 24, 2022
Three months after the first crypto NDF trade was announced to the world, momentum finally seems to be building for the derivative with two multi-dealer venues handling trades in the past couple of weeks.
While sources tell The Full FX there have been a “steady stream” of NDF bilateral voice trades, work on executing and handling these trades on multi-dealer venues has continued, culminating in both SFOX and 24 Exchange hosting crypto NDF trades.
SFOX says it “matched, executed, and cleared” its first crypto NDF trade on February 4 involving B2C2 as a liquidity provider and an undisclosed counterparty, although it does not specifically state the trade was executed against a streaming price. One week later, The Full FX understands that 24 Exchange saw the first trade to hit a streaming price on the platform.
Either way, as Robert Catalanello, co-CEO of B2C2 says in relation to the SFOX trade, “This marks a milestone in crypto’s acceptance by mainstream financial institutions.”
While 24 Exchange is working with a group of market participants – including at least one bank – to build out its crypto NDF platform, SFOX has recently launched a dedicated crypto NDF orderbook. With two platforms capable of handling crypto NDFs the likelihood is adoption will accelerate from here – as the 2022 JP Morgan e-FICC Traders Survey released this week indicates, already 27% of the 700-plus respondents are trading crypto, with another 19% planning to do so in the next one-to-three years.
As SFOX co-founder George Melika notes, “NDFs are the first derivatives instrument for SFOX, and we have a robust plan to launch a full suite of derivatives and DeFi products in 2022. This is just the beginning.”